IFT - Infratil

[Ggcc]

What happens when all the new shares hit the market? Theres currently around a dollar instant profit to be made, does anyone think there will be a sell down soon after? Personally I am surprised at the premium on market available right now.

Traders will sell, or people who need the funds will. All I know is I won't be selling any.

[Jaa]

Infratil has a long history of exceptional management of key strategic assets. But datacentres don't quite fit into that category, because they are a brand new class of strategic asset. What infrastructure investment has Infratil been in before where the international behemoths, like AWS and Microsoft Azure, have the ability to come in and swamp the market with capacity? How will the market interplay, play out?
...
I think Infratil is at a crossroads, entering a dynamic market of a type they have never experienced in their thirty year history. Some who have ridden on the Infratil pigs back over the last 10,20 30 years are happy to ignore what is going on, and back management to 'do their thing' as the good ship Infratil sails on to new heights, in the lee of their past success. But I think new investment waters are potentially troubled investment waters. Best to keep an eye out for those potential investment rocks as the good ship Infratil sails along....!

SNOOPY

I think Snoopy's basic analysis is correct. Infratil have wandered into bubble prone areas of the market for the majority of its assets that are different from their historical investments and which they are poorly positioned to forecast and understand from Wellington.

Both the data centre and renewable energy boom in the US/Europe/Asia/Australasia to support them are not supported by fundamentals. Government subsidies and big tech's desire to appear green have formed the basis for IFT's lucrative offloading of renewable assets via Long Road et al. This could sharply reverse with an election in November or any number of other ways. Just to pick two possible, the recently passed nuclear legislation or Russia's defeat in their invasion of Ukraine leads to regime change and a flood of cheap energy.

Ultimately it is AI, Crypto and Cloud that have mostly driven the boom in data centre usage. Neither of the first two yet have many profitable business uses sufficient to justify the large processing costs involved. Their capital investment in processing power is driven by free flowing VC money. Both are also highly likely to suffer from legal and regulatory action. Which is to say both are in clearly in a bubble. Infrastructure companies should not invest in bubbles.

Cloud has been very successful but it is increasingly expensive. IT goes in cycle between client/server and I wouldn't be surprised if the next one is away from massive server usage to save on these costs. One long term rule is always bet on software, not hardware which Infratil is essentially doing. Hardware improvements are normally incremental where software improvements often are orders of magnitude.

As an investor you should at least acknowledge that Infratil is now much higher risk and this is driven by the clear incentives to take larger risks to increase the market capitalisation and fees to the manager and management.

[huxley]

Morrison describes itself as a global firm. They have offices in NZ, Australia, New York, Singapore and UK. If you have a look at their team you have a pretty experienced bunch of folks, former Brookfield staff etc. it would be interesting to know how many people are NZ based these days, I think both CEOs of IFT and Morrison are based in AU?

Arguably it’s impossible to tell if the current investments are a bubble or not, it’s worth noting however that they faced criticism when they invested initially into CDC because it wasn’t infrastructure.

[warthog]

Morrison describes itself as a global firm. They have offices in NZ, Australia, New York, Singapore and UK. If you have a look at their team you have a pretty experienced bunch of folks, former Brookfield staff etc. it would be interesting to know how many people are NZ based these days, I think both CEOs of IFT and Morrison are based in AU?

IFT CEO - Wellington
Morrison CEO - Auckland

[Newman]

As an investor you should at least acknowledge that Infratil is now much higher risk and this is driven by the clear incentives to take larger risks to increase the market capitalisation and fees to the manager and management.

Looking back a few years, were Ryman and Synlait similar to Infratil now?

[Ggcc]

Looking back a few years, were Ryman and Synlait similar to Infratil now?

They could be, or they could be ahead of the curve. Only the future will let us know, but for now, I don’t see warning signs.

[maclir]

I think Snoopy's basic analysis is correct. Infratil have wandered into bubble prone areas of the market for the majority of its assets that are different from their historical investments and which they are poorly positioned to forecast and understand from Wellington.

Both the data centre and renewable energy boom in the US/Europe/Asia/Australasia to support them are not supported by fundamentals. Government subsidies and big tech's desire to appear green have formed the basis for IFT's lucrative offloading of renewable assets via Long Road et al. This could sharply reverse with an election in November or any number of other ways. Just to pick two possible, the recently passed nuclear legislation or Russia's defeat in their invasion of Ukraine leads to regime change and a flood of cheap energy.

Ultimately it is AI, Crypto and Cloud that have mostly driven the boom in data centre usage. Neither of the first two yet have many profitable business uses sufficient to justify the large processing costs involved. Their capital investment in processing power is driven by free flowing VC money. Both are also highly likely to suffer from legal and regulatory action. Which is to say both are in clearly in a bubble. Infrastructure companies should not invest in bubbles.

Cloud has been very successful but it is increasingly expensive. IT goes in cycle between client/server and I wouldn't be surprised if the next one is away from massive server usage to save on these costs. One long term rule is always bet on software, not hardware which Infratil is essentially doing. Hardware improvements are normally incremental where software improvements often are orders of magnitude.

As an investor you should at least acknowledge that Infratil is now much higher risk and this is driven by the clear incentives to take larger risks to increase the market capitalisation and fees to the manager and management.

Maybe the mix of HW and SW is the go, e.g. Apple and Nvidia.

[bull....]

I think Snoopy's basic analysis is correct. Infratil have wandered into bubble prone areas of the market for the majority of its assets that are different from their historical investments and which they are poorly positioned to forecast and understand from Wellington.

Both the data centre and renewable energy boom in the US/Europe/Asia/Australasia to support them are not supported by fundamentals. Government subsidies and big tech's desire to appear green have formed the basis for IFT's lucrative offloading of renewable assets via Long Road et al. This could sharply reverse with an election in November or any number of other ways. Just to pick two possible, the recently passed nuclear legislation or Russia's defeat in their invasion of Ukraine leads to regime change and a flood of cheap energy.

Ultimately it is AI, Crypto and Cloud that have mostly driven the boom in data centre usage. Neither of the first two yet have many profitable business uses sufficient to justify the large processing costs involved. Their capital investment in processing power is driven by free flowing VC money. Both are also highly likely to suffer from legal and regulatory action. Which is to say both are in clearly in a bubble. Infrastructure companies should not invest in bubbles.

Cloud has been very successful but it is increasingly expensive. IT goes in cycle between client/server and I wouldn't be surprised if the next one is away from massive server usage to save on these costs. One long term rule is always bet on software, not hardware which Infratil is essentially doing. Hardware improvements are normally incremental where software improvements often are orders of magnitude.

As an investor you should at least acknowledge that Infratil is now much higher risk and this is driven by the clear incentives to take larger risks to increase the market capitalisation and fees to the manager and management.

the renewables incentives might change if trump wins. big implications for IFT on a trump win

[kiora]

Secure long term contracts & locked in funding is key to mitigate any long term risks

"How listed Real Assets can also benefit from the Artificial intelligence (AI) boom"

https://www.livewiremarkets.com/wire...rm=READ%20MORE

[maclir]

the renewables incentives might change if trump wins. big implications for IFT on a trump win

They might or might not. The dosh from the Inflation Reduction Act goes to republican voting areas more than to democratic voting areas.