Infrastructure in focus: Turning on the capex tap

Magellan Investment Partners

March 2026

(3-minute read)

Many investors are well-versed in the growth story for data centres, with the rapid building of these assets a focal point in markets and the media. What is perhaps not appreciated is the large-scale capital investment outlook beyond hyperscalers, AI and data centres.

• For example, UK water infrastructure highlights the sheer volume of expected investment required. The UK Government has confirmed a GBP104 billion private investment program for the sector between 2025 and 2030. This reflects the years of underinvestment, with improving environmental performance the key objective. 

• In such a situation, there is no optionality. This investment needs to happen. The UK government estimates ~60% of water mains were built before 1980, with ~13% of these assets over 100 years old. This underinvestment has led to issues such as water pollution and stopgap solutions to support storm overflows and wastewater treatment. With public health concerns and regulatory support, we can expect that this investment will go ahead.

• For the listed UK water utilities such as United Utilities and Severn Trent, we view this large-scale sector capex positively. While large capital spending is often viewed with apprehension in other industries, in regulated infrastructure it is a source of earnings. Capital outlays roll into the regulated asset base (RAB) as they come online, forming the basis of allowed returns. More capex supports a higher RAB and greater earnings growth over time.

• These listed water utilities are instrumental in delivering the government's planned investment overhaul. In the current regulatory period (2025-2030), Severn Trent guides to 60% growth in its Regulated Capital Value (RCV or RAB) while United Utilities expects >40% growth in its RCV over the same period.

This capex story is durable for regulated utilities, even in a market downturn. Regardless of the economic climate, there are no substitutes for clean water and wastewater infrastructure. For the UK listed water utilities, while share prices are sensitive to rates, this does not reflect any change in the underlying quality of these businesses.

Funds operated by this manager:

Magellan Global Fund (Open Class Units) ASX:MGOC , Magellan Infrastructure Fund , Magellan Global Opportunities Fund No.2 , Magellan Infrastructure Fund (Unhedged) , Magellan Global Fund (Hedged) , Magellan Core Infrastructure Fund , Magellan Global Opportunities Fund Active ETF (ASX:OPPT)

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Infrastructure in focus: The HALO effect | Magellan Investment Partners

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What Goldman Sachs teaches about risk

Marcus Today

March 2026

5-minute read

Lloyd Blankfein's memoir offers a rare inside look at markets, risk and decision-making from the top of Goldman Sachs during periods of extreme uncertainty.

If you ever need proof a billion-dollar net worth won't solve all your problems, take it from the man who made that kind of cash from nothing. More on that in a minute.

Meet Lloyd Blankfein, ex-CEO of Goldman Sachs (NYSE: GS). I just finished his memoir, StreetWise.

Full credit to the man. He became one of the top dogs on Wall Street despite coming from a humble background and, somewhat oddly, not even being that interested in finance or business originally. It just wasn't a big part of his world as a young fella.

Lloyd studied law, got bored with that kind of gig, then got a job in a commodity trading firm.

Goldman later acquired the firm, and he was in the door, so to speak, to the storied investment bank. Lloyd made partner as he worked his way up... and ended up seriously rich.

Here's an early takeaway on markets...

"Managing traders, I observed that what distinguished the best ones wasn't that they were necessarily right more than the others. They simply adjusted more quickly. They made more money when they were right and lost less money when they were wrong."

Loss aversion can kill you, in other words.

What makes great traders different

Here's another that seems pertinent to the markets today, especially as AI dictates more trading:

"The quants tell you what should happen based on statistics. The traders know what can happen in markets, based on hard experience."

One wonders what quant funds make of the current block in the Strait of Hormuz. There are no statistics for that directly.

Lessons from the GFC

Probably the most interesting part of the book is when he takes us through the 2007-2009 period. Even as head of Goldman Sachs, Lloyd didn't know how bad it would get.

He writes:

"We had no overall view on which way the market would go.... There was little comprehension even among the most sophisticated thinkers in finance about the way defaults on subprime loans could affect AAA-rated mortgage securities, and credit markets generally."

It's hard not to think that the future is just as hazy for the men and women at swish names like Goldman Sachs as it is for the rest of us, despite the fancy suits and big pay cheques.

Even inside the company there wasn't agreement. What saved Goldman relative to the other Wall Street firms is they acted more conservatively due to Lloyd's aversion to "tail risks". Smart move, in hindsight.

Here's how Lloyd sums up why competitor Bear Stearns collapsed:

• They were leveraged to 33-1.
• They borrowed short-term.
• They speculated in risky mortgage securities.

Think about that for a moment. Does this sound like responsible financial management from a Wall Street "investment" bank? Hardly. That's what they did. It was more like a gambling shop.

Pressure, perspective and Warren Buffett

One anecdote that sticks out is the relaxed way Warren Buffett rolls. Lloyd writes:

"With Warren, you get one shot. If he doesn't like your proposal, or you don't like his, it's over. He proposed putting $5 billion into the firm... I started talking to him about how we could execute his investment and was about to go over some open questions."

"That's all fine," he said. "I trust you. I'm taking my grandson to Dairy Queen."

You kind of feel sorry for Lloyd as the crisis drags on, and its aftermath. He and Goldman Sachs are constantly bashed in the press. He's forced to fire staff. Protestors camp outside his apartment.

He's dragged in front of government officials regularly. Endless flying and meetings. There's a chance Goldman goes under from the general storm. They might have to merge with another company. The share price tanks. All very high stress.

Then he gets cancer.

That puts it all in perspective. Eventually, he's jack of all the hassle. He retires to read books, travel and trade the market with his own cash.

The real takeaway for investors

Another handy conclusion for us is this one...

"I always thought the future was unknowable. Most of the biggest changes in my lifetime, including the end of the Cold War, the rise of China, the arrival of the internet, and rapid transformations wrought by AI, were not just unforeseen but large unforeseeable until they were upon us. Predict the future? We can barely predict the present."

His main message is that the biggest danger is the thing you don't know about or expect. The only thing you can ever do is plan for any scenario so nothing can wipe you out completely.

That's one of our principles here at Marcus Today:

"Risk is unavoidable - make decisions using a balance of probabilities."

I'm sure Lloyd would agree.

Funds operated by this manager:

Marcus Today Equity Income SMA , Marcus Today Growth SMA