FP Foresight Global Real Infrastructure Fund on Ferrovial N.V.
Thesis
The fund initiated Ferrovial after a pullback made the valuation fair rather than full. Its scarce North American toll roads, including Toronto 407 ETR and US managed lanes, serve congested corridors where demographic growth and willingness to pay for time savings support pricing power. High operating margins provide an earnings-growth foundation, while future US tenders could expand the portfolio. Managers view the selloff driven by real yields and tender-return concerns as an attractive long-term entry, and are building the position gradually.
“These assets serve congested urban corridors, benefiting from demographic growth and pricing power as drivers pay for faster, more reliable journeys.”
Key risks
- Higher real bond yields can depress the valuation of long-duration toll-road cash flows.
- Questions about return discipline and economics on a recent tender.
- Future tenders may not replenish the portfolio at attractive returns.