Global infrastructure hit by two big risk factors

First State Investments Head of Listed Infrastructure, Peter Meany, has been in New Zealand this week updating clients on the sector.

He says the two biggest risks infrastructure faces are firstly political and regulatory changes and secondly rising bond yields. Both these have hit the sector at the same time with Brexit and the election of Donald Trump as the US President-elect, and the subsequent increase in interest rates.

"The two areas of risk for our fund have played out at the same time. Valuations have come back."

Meany says they had been expecting interest rates to rise, but in 10 days they went up what we expected to happen over 10 months.