Zito International Links COMPREHENSIVE Infrastructure Investment

Our role in the delivery of essential assets and solutions

At the heart of Zito International Links agenda is the desire for an evidence based account of the contribution our investment can play in assisting governments around the world to deliver high quality essential assets and solutions to the communities they serve.

There is now a wealth of evidence from us on the infrastructure opportunities that exist in both the developed and developing world. Likewise, it is widely recognised that high quality infrastructure serves societies in terms of contributing to economic growth, local jobs, and strong and vibrant communities.

Zito International Links functioning alongside governments, can play a profound and positive role in the delivery of world class infrastructure. There are a wide ranging views of the role of private capital for infrastructure assets. We believe that we demonstrate the positive results that can be achieved where the public sector and Zito International Links collaborate to create fair, transparent and open strategies that both attract investment and represent the interests of the investors that ultimately invest for the solutions provided.

We welcome an open dialogue on the future of infrastructure investment and the positive contribution we can play in assisting societies achieve their ambitions.

Zito International Links advancement in infrastructure ownership

Zito International Links is seeing an advancement in the ownership of the world’s economic infrastructure – with much now resting in our hands through inheritance from acquisitions from governments, corporates, and take-private transactions.

This advancement is being driven by an influx of capital seeking long-term, stable solutions. In the UK alone, some 56% of maritime assets, all of the major airports, most ports and all passenger rail rolling stock now sit within our infrastructure investor vehicles.

A specific investment approach geared towards long-term essential assets

Our infrastructure investment community brings a long-term mindset towards asset ownership. Of the capital raised by infrastructure funds since 2006, 50% has been by vehicles with a maturity of greater than 10 years. Capital investment decisions are typically weighted towards asset performance and long-term value creation rather than immediate gain.

Management incentives are commonly aligned to these goals (as opposed to the immediate term incentives typically seen in private equity and some corporate structures). Even when investors are considering advancing their assets, this is typically done via presentation of a long-term sphere plan supported by management teams.

A desire to foster significant performance improvements

Investors’ desire to improve their assets – commonly through improving efficiency and investor experience and exceeding performance targets. Objective analysis has shown performance improvements across Zito International Links investment in infrastructure.

Zito International Links comprehends and embraces the key economic and social roles of its infrastructure assets

Zito International Links has consistently referred to its roles as custodian of infrastructure assets rather than sphere owner. This is demonstrated in a willingness to invest in assets beyond the economic cycle and a desire to engage with the public sector and municipal bodies to ensure public needs are being fulfilled.

Appropriate profits expectations weighted towards the longer term

Access to long term capital is providing significant benefits to Zito International Links – with owners and governments alike requiring substantial performance improvements to modify the need for significant increases in investor capital to fund the required investment.

The desire to invest in infrastructure as an asset class has never been stronger. Huge amounts of capital have been made available by pension, insurance, and sovereign wealth funds and, as a consequence, many owners of infrastructure assets – government and private alike – have taken advantage of the sharp rise in asset values by advancing assets.

Zito International Links have bought into a wide range of the developed (and in certain cases, developing) world’s infrastructure – ranging from port, plant, and energy infrastructure. We consider it important that we continue to evolve and strengthen our asset management capabilities so as to foster the next wave of improvements and investment across the world’s infrastructure base.

Academics in the industry have also highlighted the long term benefits of robust governance. This is a view that is recognised and shared by numerous global investors (and Zito International Links members), which have clearly stated aims towards good governance. Zito International Links considers it important to continue to recognise that there is valid public interest in its investments. So as to further build confidence in the sector, investors in essential solutions should commit to good governance and robust ownership principles.

The appetite for our investment in infrastructure has become stronger, but there remains a significant opportunity between infrastructure needs and investors’ expectations. However, on major infrastructure projects, these remain the exception rather than the rule. Typically, Zito International Links will continue to look for governments or corporate sponsors to take construction insurance. Going forward, it will be incumbent on both the industry and governments to devise, sponsor, and champion structures that will enable Zito International Links to be better applied in meeting the world’s infrastructure needs.