Openstone Infraworld Global private infrastructure

For an individual investor who is tax-resident in France and holds units directly, taxable income distributed by Openstone Infraworld is subject to the French single flat-rate levy (prélèvement forfaitaire unique, PFU), also known as the “flat tax”.

Its overall rate is 31.4%, made up of 12.8% income tax and 18.6% social security contributions (prélèvements sociaux). Specific situations may, however, change this tax treatment: for example, opting to be taxed under the progressive income tax scale, holding the units through a company subject to French corporation tax, or the case of non-resident investors, whose taxation depends on the applicable international tax treaties.

Openstone, as adviser to the fund, identifies and analyses infrastructure funds, then makes recommendations. The investment decision rests solely with the management company, Fundcraft France SAS. The analysis does not rely solely on past performance and covers, in particular:

• The experience and track record of the management teams
• Investment strategy and sectors
• The quality and diversification of the assets
• Risk management
• Complementarity with the other funds in the portfolio

The aim is to build diversified exposure to private infrastructure by combining several areas of expertise rather than depending on a single manager.

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Infrastructure lies at the heart of several major transformations of the economy. The energy transition requires new generation capacity and new power grids, whilst digitalisation is driving growing demand for telecommunications networks, fibre and data centres.

New forms of mobility also require significant investment in transport infrastructure.

By providing access to several segments of the market, Openstone Infraworld therefore seeks exposure to a range of long-term structural trends rather than to a single technology or sector.

Investing directly in an infrastructure asset generally requires substantial capital and concentrates the investment on a limited number of assets.

Openstone Infraworld, by contrast, aims to spread exposure across several target funds and several infrastructure managers, with a focus on Europe. The number of target funds remains limited and the fund is concentrated solely on the infrastructure sector.

This approach means the investment as a whole does not depend on the performance of a single infrastructure asset or a single strategy. Diversification thus helps spread risk more effectively, without eliminating the risk of capital loss.

Even when economic activity slows, many of the services provided by infrastructure remain necessary. Electricity, telecommunications, digital networks and certain means of transport, for example, continue to be used.

This relatively stable demand can make some infrastructure assets less sensitive to economic cycles than other sectors.

They are not, however, protected against every risk. Changes in interest rates, regulatory changes, rising operating costs or a fall in demand can all affect their performance.

Much infrastructure meets essential and lasting needs: generating electricity, communicating, travelling, transporting energy or storing data. Its use can therefore be less dependent on short-term fluctuations in consumption.

In addition, some assets benefit from long-term contracts, concessions or regulated revenues that provide greater visibility over future income. This predictability nonetheless varies from one infrastructure asset to another and is no guarantee of performance.

Some infrastructure assets have contracts or pricing mechanisms that allow their revenues to adjust to changes in prices. The tariffs charged to users may, for example, be fully or partially indexed to inflation.

This feature can help preserve the real value of income over time. It is not, however, systematic, and depends on the type of infrastructure, the contracts in place and the applicable regulatory framework.

Income comes mainly from the use and operation of infrastructure. A motorway may collect tolls, a telecommunications network subscriptions, whilst an energy asset may be paid for the electricity it generates or transmits.

Some assets also benefit from multi-year contracts, concessions or regulated pricing mechanisms. These business models can provide greater visibility over future income.

It is this ability to generate cash flows over long periods that is one of the main attractions of investing in private infrastructure.

The private infrastructure market covers many sectors that are essential to the functioning and transformation of the economy. Openstone Infraworld can provide access, in particular, to:

• Energy infrastructure: power generation, electricity grids and renewable energy
• Digital infrastructure: fibre, telecommunications networks and data centres
• Transport and mobility infrastructure
• Social and environmental infrastructure

This diversity provides exposure to several long-term growth drivers whilst avoiding concentrating the investment on a single type of infrastructure.

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Investing in private infrastructure means investing in unlisted assets that are essential to the functioning of the economy: energy networks, transport, telecommunications, digital infrastructure and other essential facilities.

These assets generate income from their operation, for example through long-term contracts, concessions, subscriptions or regulated tariffs. Investors are therefore exposed both to the income generated by these assets and to their potential for appreciation over time.

Investing in private infrastructure is generally a long-term undertaking.

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