ASX:IFT
Infratil Ltd
Investment Summary
The fund managers believe that Infratil Ltd (IFT) represents a compelling investment opportunity due to its diversified portfolio and strong management team. They highlight the company’s ownership of key assets such as One NZ (100%), Canberra Data Centres (CDC) (48.2%), and Longroad Energy (37%), which position it well within the infrastructure sector. In their opinion, the strong mobile pricing momentum and rational behavior among industry participants at One NZ suggest a positive outlook, while CDC is uniquely capable of meeting the growing demand for Generative AI with its industry-leading technology. Despite recent market fluctuations and a trading discount to Net Asset Value, fund managers express confidence in IFT’s ability to deliver significant long-term value and capitalize on energy transition and public cloud opportunities. They remain optimistic about its valuation upside, driven by an improved understanding of its quality attributes and potential index inclusion into the ASX300.
Commentary From The Managers
Blackwattle Investment Partners
31 Jan 2025
$10.26
- IFT was the largest negative contributor to performance during the month.
- IFT fell 11% in January, impacted by sentiment regarding US renewables policies under President Trump.
- Concerns over AI model developments are affecting data centre demand.
- IFT is a NZ based, listed infrastructure investment vehicle with primary and secondary listings on NZX and ASX.
- Portfolio focuses on quality growth investments in digital, renewables, healthcare, and airports.
- Key exposure includes Canberra Data Centres (CDC), owning 48.2%.
- IFT is considered the best exposure to the AI thematic on the ASX.
- CDC is the leading Data Centre operator in ANZ, providing secure data storage for the governments.
- Positive outlook remains for AI-driven demand for data centres despite earlier concerns.
- Trump’s policy shift is focused on wind, whereas Longroad is focused on solar and batteries.
- Blackwattle Investment Partners continues to hold IFT, seeing strong upside due to current trading discount to Net Asset Value.
- Near-term valuation re-rate catalysts and IFT’s strong long-term shareholder value creation track record are supportive.
Blackwattle Investment Partners
31 July 2024
$9.82
- IFT was the largest negative contributor to performance during the month.
- IFT fell 6% in July after an equity raising in late June.
- IFT is a NZ-based, listed infrastructure investment vehicle.
- The company focuses on quality growth investments in digital, renewables, healthcare, and airports.
- Key exposure is Canberra Data Centres (CDC).
- The equity raise was to fund surging demand at CDC driven by Generative AI.
- Blackwattle Investment Partners views IFT as ‘quality early’ due to ASX's unfamiliarity with IFT’s attributes.
- Improved understanding of CDC’s position may lead to upcoming index inclusion into the ASX300.
- IFT is considered the best exposure to the AI thematic on the ASX.
- IFT owns 48.2% of CDC, the leading Data Centre operator in ANZ.
- CDC provides secure data storage for both Australian and New Zealand governments.
- CDC is uniquely positioned to accommodate Generative AI with industry-leading liquid cooling technology.
- While the market digests the equity raise, Blackwattle Investment Partners remains patient for significant valuation upside.
- CDC’s independent valuation suggests an earnings multiple half that of ASX-listed competitor NextDC, despite CDC growing earnings at twice the rate.
- Given IFT’s long-term track record of shareholder value creation, Blackwattle Investment Partners expects IFT to realize CDC’s full value at the right time.
Cooper Investors
30 June 2023
$9.42
- Cooper Investors participated in Infratil (IFT) NZ$850mn equity raising to fund the acquisition of One NZ, New Zealand’s second-largest telecom.
- Infratil is an infrastructure investment fund with ownership stakes in various assets, including:
- One NZ (100%)
- CDC Data Centres (48%)
- Wellington International Airport (66%)
- Longroad Energy (37%)
- The management team demonstrates a strong track record in extracting attractive returns from infrastructure assets.
- The One NZ holding presents upside potential driven by strong mobile pricing momentum and rational behavior among industry participants.
- One NZ is positioned to benefit from the shift to public cloud services.
- Infratil provides exposure to two key long-term themes:
- Energy transition/energy security through investment in Longroad Energy (renewable projects).
- Public cloud/AI through investment in CDC (data centres).
- Cooper Investors continues to hold because of these compelling investment opportunities and the positive outlook for Infratil's assets.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.