Baltimore-headquartered Legg Mason will launch a global infrastructure fund in July 2016, the Legg Mason IF Rare Global Infrastructure Income Fund.
It will be managed by Rare Infrastructure Ltd, an asset manager based in Sydney and focusing on infrastructure.
The management team of the fund will include Rare’s co-chief executive officers Nick Langley and Richard Elmslie.
The strategy will be available to investors in the UK on-shore fund range.
The portfolio will consist of 30 to 60 stocks, investing in listed infrastructure companies, including those in the energy, utilities, transport, and communications sectors, in both developed countries and emerging markets around the world.
Legg Mason’s fund will target a high level of income alongside long term capital growth and will seek to achieve a 5% yield per annum.
The fund will be launched with a founder’s share class with an annual management charge of 0.40% (S share class). After the fund launch, investors will be charged 0.75% annually (X share class).
Founded in 2006 and acquired by Legg Mason in October 2015, Rare managed $6.3bn (€5.6bn) as at end April 2016 in assets for institutional and retail clients.
Adam Gent, head of UK Sales at Legg Mason, commented: “Investors are increasingly recognising the benefits of the global listed infrastructure asset class.
“And, with traditional sources of yield at historic lows, now is a compelling time to launch a strategy that can offer a high sustainable income whilst also providing portfolio diversification, inflation protection, and a strong risk-return profile.”
“With the global infrastructure market expected to more than double in size by 2030, the asset class is a secular growth story, and the Legg Mason IF Rare Global Infrastructure Income Fund will be positioned to benefit directly from this growth by investing in strong income-paying infrastructure companies, enabling it to meet client needs for both capital returns and income.”
Legg Mason had assets under management of $707.1bn (€630.8bn) as of 30 April 2016.