Page 34 - Investment Advisor July/August 2022

2022 Asset Manager of the Year

Specialty Manager of the Year

Lazard
Lazard Global Listed Infrastructure Fund

espite the lingering global pan-
Ddemic, a continued reduction in
travel and rising supply chain issues,
the Lazard Global Listed Infrastructure
Fund managed a return of 19.87% in
2021, beating its benchmark by more
than 2 percentage points. Yet in many
ways it was due to the unwinding
of the pandemic that helped Edward
Keating, Lazard director and portfolio
manager, and his team’s performance
to excel in 2021.
Winning the Asset Manager of the
Year award in the Specialty category, the
first time one has been given in the cat-
egory since 2017, Keating credited their
typical three- to five-year investment Edward Keating
horizon, and the rebound, especially tions in several specific investments in
from 2020, from the COVID shutdowns. Title: Manager the U.K.” Further, “utility companies
Because prices were depressed on many Years with firm: 20 have some very strong inflation pass-
of those stocks in 2020, Lazard was through mechanisms by way of regula-
able to scoop them up or add to hold- Years in financial services: 20 tion, and as inflation started to pick up
ings cheaply, and when the world began near the second half of 2000 to 2021,”
opening again, those prices rose. Investment/Asset Class Focus: more investors were looking for that
Three key areas of 2021’s success Specialty type of stock.
included the railway sector, United The pandemic reined in driving,
Kingdom utilities and toll roads. As Asset management firm: Lazard which definitely hit toll road stocks.
Envestnet analysts wrote, the “value- Year firm founded: 1848 As Keating explained, a simple calcula-
oriented portfolio [is] made up of the Number of employees: 900+ tion to determine revenues is number of
stocks … that exhibit high revenue and cars multiplied by the tolls. And during
profit certainty due to their usually reg- AUM as of March 31, 2022: the pandemic, global traffic fell by 75%,
ulated and monopolistic market posi- $220.9 billion “which were incredible figures around
tioning and long-term, inflation-linked the world.”
contracts.” For many years Lazard had been trimming their But as COVID restrictions fell and traffic increased, these
holdings in the railroad sector, but the impact by COVID stocks rose. In the United States, most toll roads are owned by
on travel logistics and shipping lanes and routes made them public entities, like a municipality or the federal government,
think differently. Keating said. But that’s not the case in Europe and Australia,
“[In the third quarter] we viewed the impact on the railroad where Lazard owns stock in Australian, Italian and French toll
companies in an overblown manner, and saw the share prices road companies, some which own assets in other countries,
fall double digits over the course of just a few weeks, which including the United States.
allowed us to [buy] or invest further capital in companies that One of the key challenges is these assets have “very, very
while already attractive, became more attractive, and … those long-dated asset contracts in which these companies sign with
companies performed quite strongly in the fourth quarter,” governments to maintain operational ownership of the assets,”
Keating explained. he said. “They could be 50 to 75, or as long as 99 yearlong
U.K. utilities was another area in which the market seemed contracts. And it’s challenging in this market [today] to think
“overly pessimistic,” Keating said. Therefore, there was some that far out. But we believe that’s where much of the value is
softness to the market, and “we were able to increase our posi- in infrastructure investing.” — GS

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