Equity Mates · Oct 1, 2026 · 43m · 31m saved
With Shane Hurst, Managing Director and Portfolio Manager on the Global Infrastructure Strategies at ClearBridge Investments
When Shane Hurst started investing in listed infrastructure in 2010, the average US utility grew its earnings per share at 0% to 2% a year. Today he says the average grows at 9%, and some of the utilities in his portfolio at 12%.
Utilities were long treated as bond proxies, owned for a steady dividend and little else. Hurst said that electrification, AI data centers, energy security and climate resilience are now overlapping, and that the companies building the grids and pipelines underneath them have become structural growth businesses.
"I would say structurally it's the best I've ever seen." — Shane Hurst
Hurst, a portfolio manager on all of ClearBridge Investments' global infrastructure strategies, joined the team in 2010, when it was RARE Infrastructure, and before that covered Australian utilities, REITs and infrastructure as an equities analyst.
The full interview is covered here so you can skip it. 43 minutes of audio, 12 minutes of reading.
Here are the 12 insights that matter.
Key Takeaways
Construction companies are not infrastructure, in ClearBridge's definition
Short contracts, volatile earnings and exposure to the business cycle keep them out
About 90% of the portfolio passes inflation through to customers, directly or indirectly
The average US utility now grows earnings at 9% a year, against 0–2% when he started in 2010
Gas plants take 3 years to build, behind a 4–5 year queue for turbines, so wind, solar and batteries fill the gap
An AI spending slump would not hit his companies' earnings for 7–10 years, because the work is contracted and regulated
Local opposition to new projects is the biggest risk to the AI build-out, and it is already slowing US approvals
The UK cannot afford to nationalize its water companies, he said
Most of ClearBridge's outperformance came from stocks outside the index or held at very low index weights
Australia has about 3 investable infrastructure stocks, against a global universe of more than $4T
1. What Is Infrastructure
Asked how investors should think about the asset class, Hurst gave a broad definition and then narrowed it.
"Infrastructure is really essential services." — Shane Hurst
ClearBridge builds its own investment universe from the bottom up and excludes anything with commodity-price exposure
The broad category covers roads, bridges, ports, airports, regulated electricity, gas and water utilities, oil and gas pipelines, telecom towers and rail. ClearBridge keeps only assets that are regulated, run under long concessions or highly contracted, because those produce stable risk-adjusted returns. He said the last 25 to 30 years of infrastructure returns have been far more stable than broader equities.
"Construction companies people often think of as being infrastructure, but they're not, right?" — Shane Hurst
Construction firms work on short-term contracts with volatile earnings and poor margins, and they rise and fall with the business cycle. The universe does change over time. About 10 years ago, contracted renewables were admitted: wind and solar assets on 10- to 15-year "take or pay" contracts, where the price is set when the contract is signed and there is little or no volume risk. ClearBridge owns only contracted or regulated power generation, never generation exposed to the market price of electricity.
