The Legg Mason IF Rare Global Infrastructure Income fund will target a high level of income, alongside long term capital growth.
Based on current market conditions, it is expected to achieve a yield of circa 5% per annum.
The fund will hold between 30 and 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.
Managed by Rare’s team of infrastructure specialists, including co-chief executives Nick Langley and Richard Elmslie, the fund is due to launch in July 2016 with an annual management charge of 0.75% (X share class).
The fund will be launched with a founder’s share class with an AMC of 0.40% (S share class).
"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."
Established in 2006, and acquired by Legg Mason in October 2015, Rare manages $6.3bn (£4.3bn, €5.6bn) for institutional and retail clients.
The firm’s investment approach is centred on risk adjusted returns to equity (Rare) and its investment process focuses on detailed analysis of cash flows of infrastructure assets that can provide predictable, growing returns combined with underlying macro and economic valuation drivers.
Historic low yields
Adam Gent, head of UK sales at Legg Mason, said: “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.”