Mike Wells - Finding new ways to invest in infrastructure

Group

In an article originally written for staff, Prudential’s Group Chief Executive Mike Wells looks at how innovations in infrastructure investment are benefiting our customers and communities.

Many of you will have heard me make the point that our Group’s capabilities are broader and deeper than most people realise.  What is also amazing, however, is the pace at which we are upgrading those capabilities.

Whether it is the use of mobile wallets, chatbots or big data analytics, we have been making huge strides – and we have been making them fast.

Here, I wanted to highlight another area of innovation within the Group, which perhaps does not get as much credit as it deserves.

We are very good at the difficult business of allocating our clients’ capital into projects that fuel economic growth and improve the quality of people’s lives. I am thinking here about our investments in affordable homes, transport programmes that cut commuting times, broadband networks that connect people and power stations using clean energy.

The identification, the pricing and the financial structuring of infrastructure projects are specialised, hard-to-replicate skills. But they are skills that translate into strong, reliable returns for our customers and tangible benefits for the communities we serve. The long-term nature of the promises we make to our customers and clients makes long-term investments in infrastructure an ideal way of ensuring we can afford to meet those promises in full.  

Last week, our colleagues at Eastspring made an announcement which represents a quantum leap in our infrastructure investment capabilities.

IFC, part of the World Bank, chose Eastspring as their first Asian partner in a programme that mobilises funds from institutional investors into projects in emerging markets. This US$500 million partnership will help us scale up our skills in the region.

It is extraordinary to think that worldwide 1.2 billion people still have no access to electricity and 660 million lack a clean source of drinking water. If we can help a small fraction of those people get these basic amenities, while at the same time helping our customers meet their own vital savings needs, that will be a great result.

Meanwhile, in the UK and Europe, M&G is also innovating in this important field.  M&G’s new Greenfield Fund will enable our clients to participate in infrastructure projects at an earlier stage than was previously possible. That will translate into stronger returns and more essential projects receiving the funding they need.