2 days Ago
djedzura/iStock via Getty Images Investment Thesis Brookfield Infrastructure Partners ( NYSE: BIP ) and its sister corporation, Brookfield Infrastructure Corporation ( NYSE: BIPC ) have seen their share prices decline by roughly a third since the Federal Reserve started its monetary tightening in early 2022. BIP/BIPC's particular sensitivity to interest rates stems from high debt levels and substantial capital requirements, but equally important, a predominantly institutional shareholder base executing on income-oriented, low-risk mandates. As interest rates rose, those institutions saw alternative opportunities in the Treasury and bond markets.
We see the upcoming Fed easing cycle as a catalyst for infrastructure companies that have been punished in the previous cycle, particularly BIP. Company Profile For all intents and purposes, BIP is a private equity infrastructure investment fund. The company owns equity interests in various companies in the utilities, transport, midstream, and data/telecommunications infrastructure sectors, all controlled by its affiliated company, Brookfield Asset Management ( BAM ), and its parent company, Brookfield Corporation ( BN ).
What sets BIP apart is BAM's active approach to managing BIP's portfolio. BAM acquires, improves, and eventually divests assets to invest in new opportunities on behalf of BIP. This allows BIP to adapt to market trends, and capitalize on emerging sectors while generating attractive returns.
Utility Segment Nearly hal.
