The outlook for the UK infrastructure sector, which covers renewable energy, transport and utility networks, digital and social infrastructure, looks favourable compared to traditional asset classes such as bonds and equities in the year ahead, says TIME Investments (“TIME”), which specialises in asset-backed and income-producing investments.

Evidence so far in January 2022 shows that it is likely to be a challenging year for financial markets as economies rebuild and adapt following the COVID-19 pandemic. There is growing pressure from rising inflation, tightening of financial conditions, heightened volatility, and economic growth that has most likely peaked and could roll over. In contrast, these factors are likely to have a less severe impact on many infrastructure assets primarily because of the defensive characteristics that underpin them. These include long-term inflation-linked cash flows from high-quality counterparties, such as the government, and the fact that the assets often provide essential assets and services to an economy, enabling it to function successfully.

The sector is also set to benefit from the formation of the UK Infrastructure Bank, which is due to unveil a more detailed strategy to support digital connectivity and emerging technologies. This will help enable the transition to net zero through things like renewables and low carbon transport. The increasing focus on Environmental Social and Governance practices (ESG) and tackling climate change also provides a wealth of opportunities for companies which harness energy from renewable sources.

Chris Cox, CFA, Fund Manager of TIME:UK Infrastructure Income said: “Prevailing economic headwinds are likely to make 2022 a more challenging year for generating inflation beating returns in the financial markets compared to last year. The characteristics of UK infrastructure means that it is well-placed to provide investors with an attractive alternative to equities and bonds, offering investors a degree of inflation protection, diversification, relatively low levels of volatility and an attractive income distribution.”

Accessing infrastructure

The favourable performance of the sector is highlighted by TIME:UK Infrastructure Income which delivered returns of 11.11% over the twelve months to 31 December 2021, with very low levels of volatility, giving investors a total return of 35.31% since its launch in April 2018. The Fund seeks to deliver a consistent income return with long-term capital growth potential from a diversified portfolio of infrastructure exposed securities.

Conversion to UK UCITS

The Fund is now structured as a UK UCITS, which offers an enhanced level of regulation to the highest available in the UK for an equities fund. UK UCITS funds are authorised by the FCA and are subject to more stringent regulation and stricter investment conditions than Non-UCITS Retail Schemes (“NURS”) and as such are designed to ensure stronger protection for all investors, especially retail investors.

In response to the Investment Association (IA) launching their new infrastructure sector in late 2021, TIME:UK Infrastructure Income has formally changed its sector classification and benchmark to the IA Infrastructure sector. The new sector acknowledges the growing demand from retail investors for a relevant benchmark, as well as highlighting the continued growth in investment and appetite for UK infrastructure funds.

The minimum investment for retail investors is £5,000. Investors are able to access the Fund through ISAs, SIPPs, SSASs and offshore bonds via income or accumulation shares.

This is a financial promotion as set out in the Financial Services and Markets Act 2000 (FSMA). This document is issued in the UK by TIME Investments, a trading name of Alpha Real Property Investment Advisers LLP, which is the Investment Manager of the Fund with delegated authority from Alpha Real Capital LLP, the authorised corporate director of the Fund. Both TIME Investments and Alpha Real Capital LLP are authorised and regulated by the Financial Conduct Authority. Please note an investor’s capital is at risk and there is no guarantee that the Fund’s investment objective will be achieved. The value of investments and the income from them may fall as well as rise as a result of fluctuations in market, currency or other factors and investors may not get back the original amount invested. Any past performance data cited is not a reliable indicator of future results. TIME Investments may source data from third party data providers but accepts no responsibility or liability for the accuracy of data. This document does not constitute investment advice and potential investors are recommended to seek professional advice before investing. Applications for shares in the Fund can only be made via an Application Form and after reviewing the Key Investor Information Document (“KIID”) and the Prospectus and investors should carefully read the risk warnings contained within. All documentation is available on request. Specific Fund Information: Achieving the Fund’s investment objective will depend on a wide range of factors relating to the wider economy, regulations or specifically to infrastructure and renewable energy, property companies and bonds into which the Fund invests. There may be limited diversification across sectors and assets. In addition the value of any investment in equity markets is volatile and the Fund’s share price may be volatile due to movements in the prices of the underlying equity and fixed interest security holdings. Fund Status: The Fund is a sub-fund of ARC TIME:Funds III and is a UK UCITS scheme within the meaning of the rules contained in the Collective Investment Schemes Sourcebook (the “FCA Regulations”) published by the FCA as part of their Handbook of rules made under the FSMA. Issued: January 2022.

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