Charles Jillings, Utilico Emerging Markets

Investing in the Infrastructure of Emerging Markets


Meet the Manager: Charles Jillings, Utilico Emerging Markets

Duration : 22:42

Meet the... 00:00
Charles Jillings, Utilico Emerging Markets

Meet the Manager

If two ideas seem incontrovertible in these uncertain times, it is that urbanisation will continue apace and that the world’s middle class will carry on increasing in size. Banking on these two winds sustaining their course is Utilico, an investment company that aims to provide long-term returns on investments in infrastructure and utilities in emerging markets.
Utilico’s investments are weighted mostly towards Latin America and China, with a smattering of projects in Eastern Europe and the Middle East. The firm also has a desire to invest in Africa, where the return is potentially the most exciting, though too many opportunities are unlisted (capital markets are less advanced) and Chinese competition is stiff.

The type of successful company that Utilico invests in is Rumo, a Brazilian rail operator that transports agricultural products to ports for export. Once a concession woefully focused on short-term profits, Utilico has proven instrumental in turning it around. This volte-face has involved stabilizing fixed revenues and upping capacity so that today, the company owns seven trans-shipment terminals, 50 locomotives and a shipment capacity of approximately 14 million tonnes of sugar annually.

Utilico believes that global infrastructural investment demand is likely to remain robust for years to come. While infrastructure improvements across the developed world remain a given, with transit costs totalling somewhere between 0.6 and 2.0% of the value of traded goods, in the developing world that price can easily hit 40%, creating a real drag on growth and presenting huge opportunities to companies like Utilico that invest in emerging market infrastructure.
Gordon Smith of our Fund Research team, originally spoke to Charles Jillings, Investment Manager of Utilico Emerging Markets during House of Killik Mayfair. Listen to the conversation in full above.