At Reaves, we’ve carved out a very specific niche in essential service infrastructure in large part because we believe it solves a specific problem for investors. In a call last month with Havener Capital Partners, our president, John Bartlett, explained the defensive role our strategies play within a broader portfolio. A synopsis of his comments follows:
We invest in assets that typically have very low volatility and low variability, and they generally have a higher-than-average capital intensity. They may provide a higher-than-average amount of dividend income. When you put that profile in context, the main problem we solve is the classic investor conundrum of needing not just income, but also growth of income.
We also provide defensiveness within an equity allocation. One of our founders used to call our strategies an anchor to the windward equity portion of someone’s portfolio. I think many people really view us as a bond substitute. They look for us for very dependable equity income.
The recent COVID environment speaks to these companies’ resiliency. If you look across the landscape, all of these companies went through COVID without any dividend cuts to speak of. It's that reliability and stability that we are looking to provide.
To learn more about our essential service infrastructure strategies, and the role they play within a broad portfolio, we invite you to listen to the full call. Please click graphic below to gain access to the call replay.