Cathay Securities Investment Trust in Taiwan is launching an infrastructure fund in December, named Cathay Global Infrastructure Securities Fund. It will invest in listed equities of infrastructure providers. Cathay has also announced that Macquarie Alternative Investments will act as its foreign adviser.

The fund will have an open-ended tenor, and will be launched in mid-December. The target size for fund raising is $300-$350 million. An annual management fee of 1.6% will be charged. Cathay says it is targeting both retail and institutional investors and emphasizes that this is a product for investors with a conservative disposition. There is no lock-up and redemptions can be made through both Cathay itself and high street banks.

Cathay says it hopes to achieve returns of 9% per annum and the fundÆs standard deviation is targeted at 7%.

The fund will invest globally in stocks of companies that either own or operate infrastructure, including power plants, water works, toll roads, airports, ports and communication facilities.

ôWe break down asset allocations by three segments: transportation, utilities and toll roads,ö says Frank Hu, a fund manager at Cathay Securities Investment Trust. ôMost importantly is that they have stable cashflows. They have to be listed companies, and we also look for those infrastructure stocks possessing high dividend yields.ö