Simon Gray and Ian Harding, Co-Managing Partner of Arcus, reflect on a year that shook the world, and what lies ahead for Arcus Infrastructure Partners.
Without a doubt, 2020 has been a transformative year and at the same time, it has left us with time for a period of deep introspection. How has it changed you and how you work? At Arcus, what has emerged is a stronger sense of community and collaboration; we all have spent time homing in on what it truly means to be a responsible and supportive asset manager in this new era.
The restrictions brought about by this pandemic have meant that our celebrations of significant milestones at Arcus have had to be socially distanced this year – but achievements such as the final close of our second Fund, the continued build-up of our cold-storage platform Constellation Cold Logistics as well as the sale of Brisa, the last asset in our first fund, are of paramount importance to our investors and stakeholders. Quiet celebrations at the time, meant that the team quickly turned to the focus on growing our portfolio companies and finding new opportunities.
We have been recognised this year for our sustainable investing for both the UNPRI and GRESB assessments. Arcus believes that doing the ‘right thing’ as a responsible shareholder helps to ensure that we and our investee companies remain environmentally sound, safe places to work, positively contributing to the fabric of our local communities and that are well-respected organisations. During this time of uncertainty, our team and portfolio companies have looked to improve our commitment and actions on ESG matters, creating real value for our investors.
The current pace of change across many of the established infrastructure sub-sectors is greater than at any point in the 30 years or so that our team has been operating in the infrastructure space.
Even before the effects of the pandemic, everywhere you look you see fractures of the status quo and an increasing demand for a next generation of infrastructure.
Like in the telecom sector – where the then-cutting-edge digital exchanges that were commissioned with great fanfare in the 1990s, serve as today’s museum pieces. The complete transformation from voice-based circuit switching (a classic star network topology) to IP based voice, data and video (a mesh network) is almost complete, ushering in a world of close-to-zero marginal costs of moving data.
Within the energy sector, the shift from a centralised, predictable, thermal model to the distributed, intermittent, green world of today, is setting us on the path towards a low marginal cost of energy, disrupting established business models.
And not at least in the transport sector, where specialised logistics solutions and increasing pressure to decarbonise the fossil-fuel dominated world of transport – whether EV charging, electric shipping, battery or indeed, hydrogen trains are increasingly the norm.
We remain focused on building and managing infrastructure of the future, rather than investing in the assets of the past. We achieve great things with the support and expertise of our investors, stakeholders, and our dedicated team. We’re excited about what this new year has in store. We look forward to continuing the journey with you and wish you all a safe and prosperous 2021.
