Sarah Shaw, CEO and chief investment officer of 4D Infrastructure, has overseen a fund that invests in the owners and operators of essential services and user-pay assets with resilient earnings. 4D Infrastructure typically targets companies that have monopolistic market positions underpinned by contracts or regulation. In a recent interview, Shaw reflected on both successful and challenging investment decisions made by the firm.
One notable exit was Edison International, a US-listed utility company, prompted by concerns arising from California’s wildfires. Shaw decided to sell after footage emerged of a transmission line on fire. 4D Infrastructure had purchased Edison shares in July 2023 and began selling them in January 2024 as the stock price declined following the incident and subsequent lawsuits against Edison alleging its equipment caused the Eaton fire. Despite the loss, Shaw believes exiting the position was the correct decision.
On a positive note, Spanish utility giant Iberdrola has been a standout performer for 4D Infrastructure. Shaw highlighted Iberdrola’s significant investments in networks across the UK, US, and Brazil, contributing to consistent returns and double-digit earnings growth. Additionally, 4D recently capitalised on an unexpected surge in the share price of ASX-listed gas pipelines giant APA Group, exiting the trade after a rapid re-rating to maximise potential returns.
Looking ahead, 4D Infrastructure remains focused on identifying undervalued companies with long-term growth potential, particularly in sectors supporting increasing reliance on technology and communication infrastructure. Shaw believes that companies like Cellnex, a Spanish-based tower operator, present compelling investment opportunities despite current market undervaluation.
