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Infrastructure

M&G has specialist teams that cover both equity and debt investments in essential infrastructure.

At M&G, we have extensive experience in infrastructure investing and have dedicated teams focused on infrastructure debt, private infrastructure equity and listed infrastructure. Our infrastructure debt team structures and manages all classes of debt in the infrastructure sector; Infracapital, our equity team, focuses on acquiring and actively managing core infrastructure assets; and our listed infrastructure team invests in the equities and bonds of a wide range of infrastructure companies. Overall, we invest across a whole range of infrastructure, from traditional utilities to broadband services, from ports and toll roads to social infrastructure and renewable energy initiatives.

Whether they take the form of equity ownership or debt financing, these are long-term investments with many stakeholders in addition to investors, including captive consumers, communities and regulators.

Our approach

Because we believe environmental, social and governance (ESG) factors have a material impact on long-term investment outcomes, they are a key element of our investment process. We seek to build, protect and enhance long-term value through sustainable growth in our equity investments and to ensure reliable and secure cashflow receipts from our borrowers. We are committed to promoting ESG practices across the companies we invest in or provide financing to.

Our risk assessment process

We undertake extensive due diligence on behalf of our investors before we invest. Our risk assessment of potential investments reviews ESG factors, including issues which may not have been uncovered during due diligence. If a material issue is raised, we consult specialist advisers to determine possible mitigations and consider whether the risk can be addressed or is unacceptable.

Our risk questionnaire ensures that we:

  • Act in an environmentally responsible manner
  • Take a sustainable approach to the use of resources
  • Avoid irresponsible disposal of hazardous waste
  • Respect human rights and do not exploit child labour
  • Avoid bribery or corruption in any of our dealings
  • Are non-discriminatory
  • Seek equality in our employment practices
  • Have management structures which reflect the need for transparency, accountability, and equality
  • Have action plans to address any potential ESG risks

Our role as investors

Where we are taking an ownership position in a company, we take significant minority or majority stakes, and seek board representation so we have influence in making sure ESG issues are managed responsibly. Engaging with borrowers on material ESG issues in private infrastructure debt investment can encourage greater disclosure and transparency, and could lead to improved outcomes for investors. We also work with the management teams to develop and monitor ESG key performance indicators (KPIs), including:

  • Environmental action plans
  • Staff development programmes
  • Government structure reviews

We ask our investee companies to report regularly on ESG metrics, and are committed to providing a responsible investment report to our own investors.

The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.

Case studies

 
 

Gigaclear

With a representative on Gigaclear's board, we have influenced ESG matters, leading to a dedicated policy of employee diversity.

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Affinity Water

We worked with Affinity Water to implement best practice governance standards so they could deliver a sustainable and responsible service to their customers.

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Associated British Ports

We helped the UK ports owner and operator increase its focus on ESG policies, including initiatives to minimise pollution and prevent environmental damage.

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