The threat to "bring back in house" private finance initiative (PFI) contracts as part of plans to roll back private sector involvement in UK public services has seen some investors running for the hills and subsequently reduce allocations.
The most politically-sensitive UK PFI projects are those involving schools and hospitals and while some of our funds do have exposure to this area, it is relatively small. We have used the pullback, in the first quarter, as an opportunity to add to our existing holdings. There are many reasons why we like infrastructure investment, where the income streams generated tend to be very dependable, either due to public sector support or their quasi-monopolistic nature (e.g. a large power station). Allocations to alternatives in sovereign wealth funds increase to almost a quarter These ...
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