An On-Ramp for Big Ticket Deals
One of the big kahunas in infrastructure investing is Sydney-based Macquarie Group, which, along with Spain's Cintas (CTAS), bought the Chicago Skyway and Indiana Toll Road. For the most part, only institutional investors can get access to such investments. But Macquarie offers multiple other ways for individuals to play the sector.
The first two are closed-end funds: Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income (MFD) and Macquarie Global Infrastructure Total Return, a bond fund (MGU). Both trade at a slight discount to net asset value, which will likely narrow early in 2008, says closed-end fund guru Thomas Herzfeld of Thomas J. Herzfeld Advisors. The third option is a stock, Macquarie Infrastructure (MIC). It owns and manages assets ranging from terminals for corporate jets to huge storage facilities, and is the largest owner of parking lots close to airport terminals in the U.S. A stock trading at 35 times 2008 earnings may seem pricey. Josh Duitz, an analyst at Alpine Woods Capital Investors, notes that the company should be judged by how much cash it generates rather than its p-e. He expects cash available for distribution to grow 8% to 13% in 2008, driven mostly by its airport services businesses.
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