by Amy | May 13, 2025 | Energy, Investment Philosophy, Market Insight
Introduction: The Case for Real Assets in a Repricing World
In the current investment environment, where rates remain elevated, growth forecasts are patchy, and risk sentiment oscillates week-to-week, there’s a growing argument for looking past the noise. At Tamim, we’ve long been proponents of thematics grounded in long-duration cash flows and macro resilience. Infrastructure, particularly listed infrastructure, continues to earn its place as a vital, underappreciated pillar in that framework.
Why infrastructure, and why now? Because amid global uncertainty, few asset classes offer the same blend of defensiveness, inflation linkage, and long-term structural growth. As allocations to risk assets get reassessed in real time, infrastructure stands out not just as a ballast, but as a ballast with a growth driver.
This note, the first of a two-part series, outlines why listed infrastructure should command more attention in investor portfolios, especially in Australia where it’s structurally under-allocated. Our focus is not just on the appeal of stable cash flows, but on how these assets align with key megatrends shaping the global economy in the years ahead.
A Real Asset in an Unreal Environment
Infrastructure sits at the intersection of economics and physicality. Unlike digital-first business models or intangible-heavy growth stories, these are physical assets providing essential services: power, water, transport, communications. They are not easily disrupted. They are not easily replaced. In many cases, they are irreplaceable.
This tangibility matters in a world where asset prices are often untethered from fundamentals. While equity markets recalibrate to higher rates and political shifts, infrastructure offers something deeply reassuring: cash flows backed by regulation, concession agreements, or long-term contracts.
More than anything, listed infrastructure offers a rare combination in public markets, specifically predictable revenue with structural tailwinds.
Inflation-Linked Resilience
In theory, many equities are supposed to offer a hedge against inflation. In practice, few do particularly over shorter cycles. Infrastructure, however, often embeds inflation directly into its revenue models.
Whether through regulated utility returns, contracted CPI-linked escalators, or usage-based fees that track nominal GDP, infrastructure earnings tend to rise with inflation, not after the fact, but concurrently. This provides a real hedge, not just a theoretical one.
The relevance of this feature has only increased in recent years. As monetary authorities globally battle stickier inflation across labour and services, real assets with embedded inflation linkage are increasingly valuable, not just for capital preservation, but for income growth.
A Strategic Role in Portfolio Construction
We often speak of infrastructure as offering a “third way”, somewhere between bonds and equities. It carries equity-like growth with bond-like cash flow characteristics. This makes it particularly attractive during periods of uncertainty.
For long-term investors, infrastructure performs several roles:
- Diversification: Infrastructure’s correlation to broader equities is relatively low, particularly during drawdowns.
- Income stability: Cash yields from mature infrastructure assets can be consistent and above-market, with lower payout volatility.
- Defensive growth: The asset class participates in upside when growth surprises to the upside (e.g., increased utilisation) while protecting the downside via essential service provision.
It is this duality, resilience and relevance, that makes infrastructure such a core holding for institutions globally, and increasingly, for retail portfolios seeking to hedge volatility with something productive.
Thematic Alignment: From Transition to Digitisation
Perhaps the most compelling reason to revisit infrastructure in 2025 is how well it maps to the defining macro themes of the coming decade.
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Energy Transition
From grid modernisation to renewables, infrastructure is the literal and figurative backbone of the decarbonisation effort. Massive capital deployment is required, not in apps or marketplaces, but in transformers, substations, interconnectors, and storage.
Governments globally are leaning into this transition with policy and capital support. Infrastructure sits at the nexus of these policy-driven buildouts.
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Demographic and Urban Growth
Ageing populations and urbanisation are not new trends, but their implications are compounding. The demand for transport networks, aged care facilities, and water security infrastructure continues to grow, not just in the developed world, but in high-growth markets across Asia and Latin America.
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Digital Infrastructure
The digital economy still relies on physical infrastructure. Fibre, mobile towers, edge computing, and hyperscale data centres are the new pipes and roads. This “soft” infrastructure shares many of the cash flow characteristics of its hard infrastructure peers, and its capital intensity and longevity make it functionally identical from an investment standpoint.
In each of these areas, listed markets offer partial but meaningful exposure to the transition underway.
Repricing and the Opportunity in Listed Markets
Despite the strength of the underlying cash flows, listed infrastructure names have not been immune to market-wide volatility. As rates rose, discount rates increased. Valuations compressed. Sentiment swung.
But beneath the surface, the fundamentals remain largely intact. In fact, many listed infrastructure businesses have continued to grow earnings per share, pay dividends, and reinvest in their asset bases. What we’re seeing is a disconnect between price and value, a situation that doesn’t last forever.
This divergence creates opportunity.
Listed infrastructure is now trading at attractive multiples relative to history and private market equivalents. Investors with a long horizon and a focus on fundamentals have an entry point that may not last as macro clarity returns.
Liquidity vs Illiquidity: Don’t Confuse Smoothness with Safety
One critique often made of listed infrastructure is its exposure to market sentiment. Prices can move independently of fundamentals. This is true.
It’s also true of all listed assets, and often, the “smooth” returns of private infrastructure funds mask significant embedded risk. Illiquidity doesn’t eliminate volatility. It just hides it.
In contrast, listed infrastructure provides:
- Real-time pricing
- Transparent governance
- Flexibility to rebalance or exit
For investors seeking both liquidity and infrastructure-like outcomes, it remains a highly viable path.
The Australian Dilemma: Scarcity of Local Names
The domestic listed infrastructure pool in Australia is increasingly narrow. Takeovers and privatisations have removed key names from the ASX. This scarcity only reinforces the need to look globally or to seek infrastructure traits in adjacent sectors.
That doesn’t mean there’s no opportunity here. It does mean however, that investors need to be creative, thematic, and willing to build a mosaic exposure rather than rely on a single name or ETF.
The second part of this series will examine how to do this effectively, combining local names, global strategies, and thematic adjacencies to create a robust infrastructure allocation.
TAMIM Takeaway: Quiet Strength, Real Utility
Infrastructure doesn’t promise exponential upside. It doesn’t pivot or disrupt or dazzle. But that’s precisely its appeal.
In 2025, with capital markets recalibrating and many investors re-evaluating their portfolios, real assets with real cash flows and real economic relevance are having a moment.
Infrastructure offers:
- Stability in earnings and dividends
- Hedge against inflation and policy volatility
- Alignment with long-term macro trends
Actionable insights for investors:
- Reassess your portfolio’s exposure to long-duration, real assets.
- Consider global listed infrastructure as a way to enhance income and reduce beta.
- Use market volatility to build positions in attractively priced infrastructure-linked strategies.
- Focus on thematics, energy transition and digital transformation, where infrastructure is essential.
As we often say at Tamim, investing isn’t just about chasing growth, it’s about ensuring the foundations are sound. Infrastructure, now more than ever, deserves to be one of those foundations.
by Amy | May 13, 2025 | Economy, Market Insight
When the Foundations Shift, Opportunity Emerges
The global economy is standing on a precarious sandpile, one built from years of excess leverage, underpriced risk, and political complacency. With each new grain, be it a policy misstep, a rate shock, or a geopolitical surprise, we move closer to triggering a cascade.
Recent headlines, such as the US-China tariff pause, offer a reprieve from escalating tensions. However, this is not a signal that volatility is subsiding. Quite the opposite: the system is becoming more brittle, and the dislocations more frequent. As articulated in a recent macroeconomic outlook, the global economy is facing multiple simultaneous stressors, any of which could tip the pile.
At Tamim, we believe this era of continuous volatility is fertile ground for decisive investors. Over the next 3 and a half years (of the Trump Presidency), we expect repeated waves of fear and relief, repricing and recovery. This is not the time to be meak. It is a time for boldness, tempered by clarity, strategy, and deep research.
The Global Sandpile: Layer Upon Layer of Instability
John Mauldin recently described the world economy as a complex system where seemingly small changes can spark outsize consequences. The analogy of the sandpile is powerful: we have built global systems: financial, trade and monetary that appear stable until, suddenly, they aren’t.
Multiple stress points are developing:
- Offshore US Dollar Liquidity: Eurodollar markets are increasingly strained as US fiscal dominance and Fed tightening crowd out foreign borrowers.
- Trade Fractures: Despite this week’s tariff pause, the broader trend of deglobalisation and supply chain realignment continues.
- Commercial Real Estate (CRE): Particularly in the US, CRE debt is rolling over into a higher-rate world.
- Municipal and Sovereign Debt: Global public finances are deteriorating, with the US now running $2 trillion deficits in peacetime, a fiscal position that may become unsustainable under even mild stress.
This is not fear mongering. It is simply the reality of a system in which each fault line interacts with others in unpredictable ways.
Repricing and the Mirage of Stability
Markets are conditioned to expect reversion to the mean. But in systems under stress, the mean itself is shifting. What was once considered “normal” may no longer be relevant.
For example:
- Yields are rising not from strength, but from disorder. A steepening US yield curve typically precedes recovery, but here it reflects a flight from duration amid inflation, fiscal fear, and geopolitical uncertainty.
- Monetary policy has limited power to backstop growth. The Fed and other central banks are constrained by inflation risks, even as consumer and business confidence wavers.
- Liquidity can vanish quickly. The velocity of money, once a quiet footnote, is now a flashing red light, warning of systemic slowing that can cascade quickly.
What this means for investors is simple: stability is not the baseline. Volatility is.
Volatility as a Feature, Not a Bug
Periods of economic tension often birth innovation and reallocation. This was true in the 1970s, the early 2000s, and again post-GFC. What we’re entering now is not dissimilar, a world where:
- Mispriced assets are common.
- Policy overreach and correction alternate.
- Narratives change monthly.
Mauldin’s core message: the coming cycle will be jagged, non-linear, and filled with opportunities for those who can stay nimble and long-term focused.
At Tamim, we view volatility as the mechanism by which capital is transferred from the reactive to the prepared. Our role is to be in the latter camp.
Thematic Conviction Amid Disorder
We are applying this lens across our thematic portfolios. Where others see noise, we see:
- Technology Repricing: AI, automation, and cloud computing continue to accelerate. Ýet valuations have reset, especially outside the mega-cap bracket. We are positioning into profitable, under-the-radar names where the market is yet to catch on.
- Energy Transition: Australia’s shift towards a decarbonised economy is not optional. It’s inevitable. We continue to focus on the enablers, grid software, smart metering, storage infrastructure. Companies like Gentrack and Southern Cross Electrical remain well-placed.
- Commercial Property Repricing: As Mauldin notes, CRE globally is repricing, particularly in office and retail. Yet repricing creates opportunity. We’re focusing on suburban, ESG-aligned office spaces with value-add potential.
- Capital Rotation from Passive to Active: Benchmark-hugging may have worked in the liquidity-flooded 2010s. It won’t work now. We are already seeing capital flow to active managers who can navigate dislocation, not merely absorb it.
Macro Watch: US-China, Inflation, and the Political Cycle
The temporary truce in US-China tariffs is not the end of trade tension, it is a tactical delay. It reflects political strategy, not economic cooperation. As the US election cycle ramps up, expect more such blinks.
However, these pauses offer windows of clarity and pricing dislocations. Investors who can interpret these episodes not as direction, but as opportunity, will thrive.
The Fed, the RBA, and others are walking a tightrope. But history suggests the balance will tip. When it does, capital will flood into underloved sectors, likely triggering explosive rebounds.
Be positioned before that happens, not after.
TAMIM Takeaway: Opportunity Favours the Prepared and the Brave
In the next three years, we will likely see:
- More market corrections
- More major geopolitical or financial shocks
- Shifting policy settings as governments grapple with fiscal pressures
- Major moves in interest rates, both up and down
None of this should frighten disciplined investors. If anything, it should excite them. Such dislocations are where long-term returns are built.
Actionable insights for investors:
- Don’t wait for the all-clear, invest on fundamentals, not headlines.
- Keep powder dry, but don’t stay on the sidelines for too long.
- Focus on companies with strong cash flows, scalable business models, and structural tailwinds.
- Stay light on leverage, high on agility.
- Use volatility as an entry point, not an exit excuse.
The next decade will be shaped by those who step into complexity with clear strategy and strong hands. This is the time to think boldly, act patiently, and embrace the dislocation as the birthplace of value.
by Amy | May 13, 2025 | Weekly list
This week’s TAMIM Reading List explores how we think, how we age, and how we shape the world around us. We begin with a debate at the heart of neuroscience: what is consciousness, and where does it come from? From there, we spotlight the surprising brain-boosting effects of gardening, nature’s antidote to cognitive decline. On the cultural front, Nicolas Cage’s wildest roles reveal a surprisingly coherent artistic vision. In economics, rising tariffs are quietly creeping toward the US consumer, while a $200B philanthropic bet raises bold questions about legacy and risk. We examine Sinofuturism’s techno-cultural lens on Asia’s future, and ask if a single line of code might just fix Google. Across science, art, policy, and platforms, this week is about futures being reshaped.
📚 Where Does Consciousness Come from? Two Neuroscience Theories Go Head-to-Head
📚 Seven Roles That Explain the Deeply Nuanced, Not Crazy Art of Nicolas Cage
📚 Rats In The Cellar: Tariffs Are About To Hit The US Consumer And No One Sees Them Yet
📚 The $200 Billion Gamble
📚 How gardening can help you live better for longer
📚 Thoughts on Sinofuturism
📚 Does One Line Fix Google
by Amy | May 7, 2025 | Weekly list
This week’s TAMIM Reading List captures a world in flux, where technology, money, ethics, and identity intersect in surprising ways. Google is quietly shifting its role from search engine to answer gatekeeper, while North Korea is reportedly gaming AI job interviews to infiltrate tech firms. As AI accelerates, thought leaders warn that protecting human creativity may soon be as important as protecting natural resources. In the U.S., a stark split in consumer behaviour emerges between the wealthy and the rest. Meanwhile, Elon Musk’s political transformation adds fuel to an already polarised moment. For balance, we finish with dogs, pills, and Aaron Judge’s improbable year.
📚 The World’s Largest Search Engine Doesn’t Want You to Search
📚 Wealthy consumers upped their spending last quarter, while the rest of America is cutting back.
📚 North Korea Stole Your Job
📚 This Pill Promises to Give Your Dog More Years. You Might Not Like What Comes With Them.
📚 Inside Elon Musk’s Grievance-Fueled MAGA-morphosis
📚 In the age of AI, we must protect human creativity as a natural resource
📚 We just had the most preposterous year of Aaron Judge
by Amy | May 7, 2025 | Energy, Stock Insight, Technology
Introduction: Investing in the Utilities of Tomorrow
In the final instalment of our Small Cap Energy Transition Playbook, we explore a vital but often overlooked enabler of the global shift to clean energy: software for utilities. Following our reviews of Southern Cross Electrical (infrastructure) and Energy One (trading platforms), we now turn to Gentrack (ASX/NZX: GTK), a small cap leader in billing and customer engagement software, positioned at the heart of energy sector digitisation.
As the global push toward decarbonisation accelerates, the transformation of utility IT systems has become critical. “Smart grid software,” “utility billing platforms”, and “digital transformation in energy” are more than just buzzwords, they reflect a generational shift in how power is delivered, priced, and managed. Gentrack offers investors exposure to the software spine of that transition.
Thematic Fit: From Ageing Systems to Agile Software
Gentrack is one of a handful of global software firms providing cloud-based billing and engagement solutions tailored to energy and water utilities. Why now? Because the industry is experiencing a once in a generation churn event: legacy platforms, often built over 30 years ago, are no longer equipped to handle the complexity of distributed energy, dynamic pricing, or customer centric services.
A key catalyst: SAP, the market incumbent, is retiring its on-premise billing stack by 2027. Utilities globally must transition to SAP HANA or choose alternative providers. This has created a spike in RFPs and tenders, with many utilities re-evaluating their vendor mix. Gentrack’s next-gen product, g2.0, has emerged as a modern, scalable alternative.
Source: Company
GTK’s g2.0 is built for modularity, fast deployment, and integration with renewable systems, smart meters, and digital apps. It enables utilities to future-proof their billing, improve customer experience, and embrace regulatory changes with speed.
Financial Profile: Profitable Growth with Recurring Revenue
Consensus forecast for Gentrack is forecasting NZ$240 million in revenue and NZ$42 million in EBIT for FY25 (September year-end), underscoring its earnings momentum. Ahead of 1H25 results (due 19 May 2025), analysts expect:
- Revenue of NZ$110–$118 million (+8–15% YoY)
- Recurring revenue rising to NZ$76 million (from NZ$65 million)
- Cash EBITDA of NZ$20 million (before SBC)
Importantly, Gentrack’s revenue is largely subscription-based, giving it high earnings visibility and strong operating leverage. Even as it invests in R&D and international expansion, margins remain healthy.
Growth Signals: Pipeline Maturing, Team Expanding
Gentrack’s hiring spree tells its own story. With 46 open roles and a 5% headcount increase over six months, GTK is clearly preparing for delivery. Recent job ads in Bulgaria suggest work has begun on a significant project with the country’s largest retailer with over 4 million meter points. GTK recently won UK contracts with Utility Warehouse and Ecotricity (UK), and already counts AC Energy (Philippines), and Neom (Saudi Arabia) as recent customers.
Management has also reported a surge in RFPs, spurred by its strengthened reputation and the SAP transition tailwind. Trusted consulting firms like EY and Deloitte are increasingly recommending GTK, creating new inbound opportunities.
The company has guided to >15% revenue CAGR and 15–20% EBITDA margins over the medium term—despite fully expensing all R&D costs.
Balance Sheet and Strategic Optionality
With NZ$70 million net cash, Gentrack has dry powder for opportunistic acquisitions that could complement its product suite or geographic footprint. Management has hinted at bolt-ons, but the focus remains on disciplined growth.
GTK’s clean balance sheet, proven management, and expanding pipeline give it the optionality to grow both organically and via acquisition.
Catalyst Watch: May Results Key to Re-Rating
GTK has a track record of outperforming post-earnings:
- Last four reporting periods saw rallies of 10–29%
- Market responds favourably to contract wins and pipeline updates
May’s 1H25 results will be pivotal. Investors should watch for:
- New contracts (Bulgaria confirmation, other EU wins)
- FY25 guidance upgrades
- Strength in recurring revenue
- Margin expansion as scale increases
Given GTK’s high operating leverage and expanding addressable market, we believe the stock is worth $25.00 on a 2-year view.
Tamim Takeaway: Betting on the Backbone of Energy Digitisation
Gentrack is not just a billing software provider, it is a mission-critical enabler of the modern utility. As energy providers shift from centralised generation to distributed, digitised, and customer centric models, platforms like g2.0 are indispensable.
For Tamim, GTK fits squarely within our investment framework: a founder-aligned, profitable small-cap with structural tailwinds, high recurring revenue, and global growth prospects. As with Southern Cross and Energy One, GTK provides exposure to the picks and shovels of the net-zero transition, without betting on binary outcomes.
Actionable insights for investors:
- GTK is a prime candidate for investors seeking digital infrastructure exposure in the utilities sector.
- Monitor May’s 1H25 results for evidence of revenue acceleration and contract conversion.
- Long-term structural tailwinds (SAP sunset, regulatory reform, decentralised energy) make this a multi-year compounder.
- With strong cash flow and no debt, GTK offers growth with downside protection.
Gentrack isn’t flashy, but it’s foundational. And in energy, that’s where the real value lies.
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Disclaimer: Gentrack (ASX/NZX: GTK) is held in TAMIM Portfolios as at date of article publication. Holdings can change substantially at any given time.
