July 22, 2025
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From the start of 2025, global headlines have been dominated by a flurry of tariff and trade announcements from the Trump administration. Since taking office, President Trump has threatened, implemented, and walked back an ever-evolving array of levies.
These range from the sweeping “reciprocal tariffs” on more than 180 countries implemented on April 2 to more targeted actions against specific countries (including rivals like China as well as major trade partners such as Canada and Mexico)
and industries (such as steel, aluminum and automotive imports).
This has led to rising trade tensions, a dramatic increase in uncertainty, and a corresponding period of volatility as markets attempt to recalibrate after each new tweet and executive order. While markets have largely rebounded post tariff pauses and
productive trade negotiations, US consumer sentiment from the Federal Reserve has plummeted since January. And while the US economy is resilient and well-positioned to respond to further economic developments, the risk of rising inflation and unemployment
remains elevated.
The characteristics of infrastructure
Although conditions are undoubtedly unnerving for most investors, we believe that infrastructure investments are partially shielded from first-order tariff risks given that they are placed on goods, and not on services. The trickle-down, indirect impacts
on large, difficult-to-replicate and highly contracted infrastructure projects are also generally thought to be more muted, reinforcing the asset class’s reputation as a ballast in volatile markets.
Furthermore, infrastructure cashflows are generally underpinned by strong contracts with high-quality customers, ranging from provincial government agencies and local school districts to creditworthy corporate customers. These contracts share several
key characteristics: they tend to be fixed-price, many of them have embedded inflation escalators, and they generally extend for long durations. These characteristics help to support the predictability of future cashflows, allowing for proactive capital
management and contributing to the stability of infrastructure as an investment strategy.
Diverse portfolio of infrastructure assets
The Private Client Infrastructure Portfolio holds over $7 billion in assets under management in over 100 individual infrastructure projects in Canada and other select other jurisdictions, such as the United States, Chile and Bermuda. We invest directly
in high-quality, mid-sized infrastructure projects with long-term capital growth and/or stable cash flow characteristics. Our portfolio's average investment size is approximately $150 million per project, and average enterprise values are generally
under $1 billion.
The Private Client Infrastructure Portfolio is well-positioned to endure this period of instability given the essential nature of the services our assets provide, the strength of our contracts, and the lack of significant cross-border exposure for most
of our assets. A common feature of our assets is their ability to deliver a critical service to a relatively captive customer base within the community in which they operate. This includes several key transportation assets that facilitate the movement
of goods and people, hospitals that serve local residents, and businesses that provide necessary accommodations for thousands of students. We own more than two gigawatts of renewable power projects, which together provide enough low-cost, clean energy
to power the equivalent of more than a million and a half Canadian homes each year.1 Together, these projects form a diversified portfolio capable of generating resilient cash flows throughout most economic and market cycles.
Resilience
The vast majority of our infrastructure projects operate regionally, with minimal cross-border exposure. Services are typically provided to a resident customer base, such as the sale of power to a local electricity and transmission cooperative or the
transportation of students within a local school district.
Our fully contracted projects have on average 20 years remaining, while those with a broader customer base and shorter-terms benefit from high renewal rates. Several of our investments also have fixed-price operating and maintenance agreements in place
to manage exposure to potential increases in operating costs or the ability to pass rising expenses on to customers over time through explicit contract provisions or strong market positions with pricing power. Finally, our portfolio almost entirely
consists of assets that are already in operation (rather than in the development or construction stage), which helps to limit exposure to supply chain disruptions or tariff-induced cost fluctuations and project delays.
Opportunity
The secular forces of digitalization, decarbonization, and reindustrialization that have been driving infrastructure opportunities for the past several years continue to persist. We believe these megatrends, combined with the significant funding gap for
the creation of new infrastructure projects and maintenance of existing assets, as well as continued pressure on government balance sheets, may provide strong tailwinds for the asset class despite near-term uncertainty.
Widespread political noise can create periods of strong investment opportunities for well-positioned long-term investors. In our experience, periods of economic instability and dislocation can surface attractive opportunities at better valuations. Our
pipeline of potential new investments remains strong at over $1.7 billion in value. We are observing robust deal flow in renewables including solar and wind, as well as traditional infrastructure, including logistics, social, and digital infrastructure
opportunities. Looking ahead, we are confident in the strength of our experienced team and remain focused on our disciplined investment strategy and active asset management approach as we seek to navigate this period of market turbulence.
The benefit of direct investment in alternative assets
We now offer private clients the ability to invest in alternative assets via pooled funds, an opportunity historically available only to large institutional investors, such as pension funds. Our alternative investment portfolios provide direct ownership
of the underlying assets, like hospitals and solar power farms, which makes them an attractive, differentiated opportunity for the qualified investor.
Direct investment in alternative assets via pooled funds is how large institutions typically choose to invest. Direct investment offers the full diversification benefits associated with alternative assets—unlike buying publicly-traded vehicles such
as real estate investment trusts (REITs), exchange-traded funds (ETFs) or other mutual funds that offer proxy access, which are all more closely correlated to stock market movements.
Beyond diversifying stock and bond holdings, incorporating alternative assets in your portfolios – such as hedge strategies, real estate and infrastructure – allows for less correlation to traditional investments, and offers the possibility
of improving returns.2 If you wish to talk to one of our expert Wealth Advisors, complete our get in touch form on this page.