Eric Purington, Portfolio Manager for the aberdeen Global Income Infrastructure fund says that large-scale infrastructure investors have raised billions to pump into the big names in the sector, the smaller private-equity firms and the middle-market opportunities have struggled to bring in capital. That has created an opportunity that Purington has taken advantage of for the last few years and that he sees continuing, as the infrastructure space continues booming; middle-market opportunities grow and mature and really pay off when they become investment targets for those well-funded, big private-equity investors. Purington says this trend has persisted over the last few years, is not dependent on government issues or subject to as much political risk as other infrastructure ideas.
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CHUCK JAFFE: We’re talking middle-market infrastructure private equity with Eric Purington, portfolio manager for the aberdeen Global Infrastructure Income fund, this is The NAVigator. Welcome to The NAVigator, where we talk about all-weather active investing and plotting a course to financial success with the help of closed-end funds. The NAVigator is brought to you by the Active Investment Company Alliance, which is a unique industry organization representing the full spectrum of the closed-end fund business from users and investors to fund sponsors and creators. If you’re looking for excellence beyond indexing, The NAVigator will point you in the right direction. And we’re going in a very specific direction today, looking at a segment of the infrastructure space with Eric Purinton, he is infrastructure and renewable energy private equity portfolio manager at aberdeen, and again, he is behind the aberdeen Global Infrastructure Income fund, ASGI, the ticker symbol there. Learn about the firm at Aberdeen.com and learn about the fund by going to AberdeenASGI.com. And if you want to learn more about closed-end funds, interval funds, and business-development companies generally, visit AICAlliance.org, that’s the website for the Active Investment Company Alliance. Eric Purington, it’s great to have you back on The NAVigator.
ERIC PURINGTON: Yeah, good to be here, Chuck.
CHUCK JAFFE: You have been here before, so I want to get an update, how it turned out from the last time you were here and then move us along to your outlook for your space. But you’re going to do a much better job defining your space than I will, so let’s talk about what ASGI does and how you define your role.
ERIC PURINGTON: Yeah, certainly. We like to think ASGI plays a special role in the closed-end fund space because we target the full spectrum of infrastructure investments, both on the listed side, so we’re talking the big companies like [inaudible 0:02:30] for which we target 75% of ASGI, but what really makes us unique is the 25% target in middle-market private infrastructure investments, these are opportunities that really have no parallel in the public markets and have been a really special part of our fund to date. Really for the last year our fund, on a NAV basis, has been over our 2020 IPO price of $20, as of today, Friday, March 21st, we’re at $20.19, and today we’ve distributed almost $7.30 or about 36%. Our current yield was at 12.3% and we’re really happy with that and we really think the opportunity going ahead is very strong as well. As I said in the beginning, we target 25% of funds’ NAV into private middle-market infrastructure investments, we’re currently at 20%, and that’s been the subject of our previous two interviews.
CHUCK JAFFE: It has been, and those interviews were pretty interesting because in each case you were looking at opportunities, the most recently one of those was in the fall of 2023 when we were looking at some deals like Exxon and Chevron, et etcetera, and talking about how you expected that was going to create an infrastructure merger wave and we’d see a lot of other implications. That pretty much played out exactly as you called it, didn’t it?
ERIC PURINGTON: In part. In part, and that’s why I like coming on the show here, Chuck, is you keep your guests honest. I say in part, on the upstream side, which to be clear, upstream investment, in our understanding, is not infrastructure investment. There certainly was a wave that predated and followed that initial discussion we had in, I believe it was November 2023. What I spoke then was you might see this on the midstream side, and I’d say certain midstream companies, particular those with long dated contracted income, some of which are in the MLP space, some of which are not, certainly meet our definition of infrastructure and are included both in the public and private investments. What I said at the time is that you’d see this massive wave of midstream M&A there, and maybe you’ll never hear a guest on, let’s say CNBC, say this, but I was wrong, that actually didn’t turn out, actually M&A activity went down in 2024. That doesn’t mean however this is bad news for our portfolio, because in fact we focus on the high-quality contracted assets, what we’re seeing is a big focus within both the strategic and financial investors in the space.
CHUCK JAFFE: I was giving you credit, Eric, for the fact that although the merger wave didn’t quite happen the way you expected it to, the results for the sector and your fund were what you would expect.
ERIC PURINGTON: Definitely. And what we’re seeing now, and this is a theme we’re hearing about all over the business, is really a focus on energy export, energy security, and we’re certainly aligned on that in both the public and private investment space. We’re very excited about energy infrastructure investments for the year ahead and we think it’s actually a very special time in the market right now.
CHUCK JAFFE: You also, in the other appearance you had previously in The NAVigator, were looking at the middle-market infrastructure businesses like waste management and some of those other sorts of things, and there your forecast, again I would say it was spot on. It may be more accurate in your mind because you didn’t have the miss on the one aspect, but again pretty much spot on. As we look at those forecasts and we now try to put it ahead, you said a little while ago that there are some clear opportunities to you for 2025.
ERIC PURINGTON: Definitely.
CHUCK JAFFE: Are they extenuations of what we’ve already seen in the opportunities that were previously identified or are they different? Or both?
ERIC PURINGTON: Great question, Chuck. I’d say in short, both. One thing that separates a lot of private investors like myself from a lot of public investors, and I’d say this does not really reflect how my co-portfolio manager Josh Duitz sees the world, is that private investors think in multi-year cycles, multi-year opportunities, and at least some public investors, again, not Josh Duitz, are thinking on a quarterly, even weekly basis, and the themes that we talked about back in 2023 still exist today. In short, it’s basically very basic supply and demand, right? Large cap infrastructure funds have raised hundreds of billions of dollars to deploy into private infrastructure companies, and for a variety of reasons, the middle-market funds, we’re talking private equity funds not closed-end funds, private equity funds have struggled. It’s really kind of a big fish in the pond type world out there, and they’ve struggled to raise capital, but they still have amazing opportunities. I mean, we’re talking about an opportunity I saw recently that had something like a 19% cash flow yield, amazing lower middle-market infrastructure opportunities. And when these opportunities come up, when these smaller private equity funds don’t have the capital for it, oftentimes they give me a call. I’ve been in this space for 15 years and we see if this is a good fit for ASGI, and when it is, we put into the portfolio. And then when we go to sell those businesses after the value creation has been achieved, guess who’s there in waiting to deploy capital into infrastructure private businesses? It’s those same large funds that have raised hundreds of billions of dollars. And in fact, in ASGI today we’ve had two exits, both of which were to large infrastructure sponsors, so this is a trend that didn’t change with the administration, doesn’t change with interest rates really, this is a long-term trend. People, institutional investors putting capital into large infrastructure funds, and those large infrastructure funds competing to snap up our smaller assets. We’re really excited about what this meant in 2024, we’re really excited what this meant for 2025, and we think this is actually an opportunity really for the years to come in ASGI.
CHUCK JAFFE: Can’t talk with you or with Josh without at least taking the pulse of infrastructure generally, because infrastructure is an area, that although it can be defined in a lot of different ways and there’s a lot of different places to look at it, it is an area generally that does have some overhang with the political scene, and we are at a pretty dicey time when it comes to politics in this country. I’m not asking you to make a political statement, but I do want to know how much do you worry at all right now in your space that politics or geopolitics will wind up being a drag on infrastructure given all the otherwise go, go, go kinds of conditions that you see there?
ERIC PURINGTON: Great question, and certainly there are specific opportunities that are impacted by US administration policies more than others. On the whole, we review these when we make investments, whether it was the Biden administration or the Trump administration, and review these in terms of a broader portfolio management position. But ultimately, and I think you’ve seen this in the market turmoil of the last couple weeks, there has been a flight to safety, and infrastructure companies, infrastructure assets, we feel very confident about this because they’re some of the safest things you can buy and hold in your portfolio. At the same time, I would also like to point out, ASGI has a global mandate, Josh has a number of non-US holdings in the listed portfolio, and he’s covered that space for 20 years now. On the private side we actually have a couple private opportunities, holdings that are based outside the US, two in Canada and one in Chile, and we really think our portfolio is weathered to take advantage of the opportunity ahead, but also anything unexpected. That’s why you do infrastructure, infrastructure’s going to be there regardless of interest rates, regardless of market conditions, regardless of administrations.
CHUCK JAFFE: Eric, really interesting stuff. I wish we had more time to talk, but the good news is I know that you and/or Josh will come back and chat with us again and we can explore infrastructure again down the line.
ERIC PURINGTON: For sure!
CHUCK JAFFE: Thanks so much for joining me on The NAVigator to talk about it.
ERIC PURINGTON: Really appreciate it, thank you.
CHUCK JAFFE: The NAVigator is a joint production of the Active Investment Company Alliance and Money Life with Chuck Jaffe, and yep, I’m Chuck Jaffe, and I’d love it if you’d check out my hour-long weekday show on your favorite podcast app or by going to MoneyLifeShow.com. To learn more about closed-end funds, interval funds, and business-development companies go to AICAlliance.org, that’s the website for the Active Investment Company Alliance. Thanks to my guest Eric Purington, he’s one of the portfolio managers for the aberdeen Global Infrastructure Income fund, ticker ASGI. Learn about the firm at Aberdeen.com and about the fund at AberdeenASGI.com. The NAVigator podcast is new every Friday, be sure not to miss an episode by subscribing or following along on your favorite podcast app. We’ll be back next week with more closed-end fund fun, and until then, happy investing, everybody.
Recorded on March 28th, 2025
