The assets that these entities own are high-quality long duration, infrastructure assets that are hard to replicate. These are inflationary hedged assets in nature, that are expected to produce predictable cash flow over time. That said, these businesses experienced significant headwinds due to increasing interest rates in the last few years that led to a jump in financing costs, which not only squeezed profitability of these companies but also made it much more difficult for these companies to come up with attractive financing terms to fuel growth. Given we they are trading, we think the future prospects from here look decent, and investors could have some upside potential from a recovery along with a good dividend yield, and we think investors need some patience for these names. When comparing returns, it is important to remember that each company did a spin out, with shareholders getting shares in BEPC and BIPC respectively, several years ago.
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