The Orange Ridge Capital Infrastructure & Real Estate Strategy is intended to deliver attractive risk-adjusted returns with a stable, predictable income by investing in transportation assets and sustainable real estate located in North America, Latin America, and Europe.
Infrastructure assets provide sustainable long-term cash flows, inflation-linked revenues and high operating margins with minimal maintenance capital requirements. These assets are vital to economic development and benefit from relatively inelastic demand.
The main infrastructure growth drivers are:
- Global population growth
- Existing infrastructure in need of repair or refurbishment
- New infrastructure development in emerging markets from growing wealth and urbanization
- Acceleration of privatization of infrastructure due to declining availability of public funds
The Transportation sector is comprised of essential infrastructure networks that move freight, bulk commodities and passengers, including railroads, toll roads, seaports, bridges, tunnels, and airports.
Given the essential nature of transportation assets, the high barriers to entry and the structure of concession agreements, volumes generally grow in-line with GDP while pricing increases in-line with inflation.
The long-term growth potential of volumes and pricing, combined with the low operating costs for most transportation assets, results in attractive investment opportunities.
Orange Ridge Capital offers a strategy diversified by geography and by transportation type in order to create the optimal risk/return profile.
Sustainable Real Estate
Sustainable real estate typically generates relatively long-term cash flow streams that offer downside protection as well as exposure to economic growth. Property assets, particularly well-located, high-quality assets, typically generate relatively long-term cash flow streams that offer downside protection as well as exposure to economic growth.
According to the Global Real Estate Sustainability Benchmark (GRESB), investors are increasing their focus on integrating sustainable practices into their existing and new real estate investments due to the favorable impact of sustainability factors on both risk and returns. Studies generally found that ´Green Buildings´ with Leadership in Energy & Environmental Design (LEED) and ENERGY STAR certifications have higher rental rates, higher occupancy rates, lower utility costs, increased sales prices, and low construction cost premiums.
Large publicly traded retail tenants and institutional real estate investors are forcing for more ´Green Buildings´ with sustainable measures, including energy and water efficiency and waste reduction that improve property performance and mitigate risks. These environmental measures are targeted towards reducing costs and consequently have a positive impact on asset values.
Orange Ridge Capital offers a sustainable real estate strategy diversified by property sectors such as Office and Residential mainly in the U.S., Brazil, and Europe.