When it comes to investing in fine wines and infrastructure there’s not a lot of obvious similarities but for Meegan Sullivan, picking quality assets that age well is her speciality.
In this interview from The Constant Investor Success Stories podcast series, Meegan as Managing Director for RPS’ Infrastructure Solutions talks on investing in infrastructure, private companies and wine, her happiest investment of all.
What to look for when investing infrastructure stocks
Increasingly, infrastructure is something individual investors want exposure too. In a low return environment where everyone is looking for income, infrastructure’s stable yield makes it an attractive asset class. Meegan has a few pointers from an investors perspective:
• Look at listed companies with diversity in their infrastructure base who operate in the infrastructure space in which you are interested in investing.
• Consider superannuation investment in infrastructure and leveraging the capital of the fund.
• Research. As a starting point for investment homework, look at the history of public private partnerships (PPP) and who has been successful as the sponsors of those partnerships.
Investing in private companies, not always the golden egg
We all love our pay cheques but the driving force in Meegan’s career has been less about titles and money and more about the ability to influence outcomes, decisions and strategy.
One approach Meegan took in driving influence was making a personal financial investment and reinvesting dividends in the company she worked for.
The result was meaningful ownership, in turn leading to the ability to influence the direction of the business.
In Meegan’s case, her investment paid off when the business sold and she realised the investment.
It’s rewarding when it all goes well, but beware, investing in a private company isn’t the golden egg says Meegan.
This type of investment doesn’t come without risk, don’t jump in without first doing some thorough homework. Limitations include dividends, strategy, reinvestment in infrastructure as the business grows, securities and the fact that the companies are liquid. There’s also the tax implications of employee share schemes.
Meegan’s key piece of advice?
Look at how the business runs for twelve months, see it through some good and bad times and then decide if it’s worth putting your own money on the line.
Infrastructure aside, it’s Meegan’s passion for wine which has resulted in her happiest investment. She’s diversified her portfolio with an impressive cellar collection, although it’s not necessarily an investment she’s purchased to trade on at this stage.
It’s an investment that benefits her mind as well as her portfolio, she’s continually learning more about wine, an area which has nothing to do with her core discipline and, like her love of Shakespeare, keeps her interests varied and balanced outside of her professional role.
A word of warning to those this type of investment: keep the cellar offsite. “If you have a cellar onsite, you’ll never build a cellar” says Meegan. All too tempting to polish off a bottle of your collection after a hard week’s work!
Listen to the full interview and hear the stories of many other fascinating female leaders at The Constant Investor.