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John Laing reviewing broadband, storage opportunities

After making maiden investments in offshore wind and US renewables in 2016, the manager of two listed funds is eyeing further diversification.

London-listed infrastructure developer John Laing is in the process of evaluating potential investments in the broadband, energy storage and water sectors.

The company explained that the effects of climate change and the changing ways of electricity distribution are driving its interest in water and energy storage respectively, while its interest in broadband investments has been piqued by an EU directive in September for the bloc to have 100 percent high-speed coverage by 2025.

In his review of John Laing’s 2016 accounts, chief executive Olivier Brousse stressed the process of investing in these new markets is at an early stage but expressed optimism about their prospects.

“Beyond the PPP and renewable energy markets, we continue to research other asset classes that look as if they could fit our business model in order to feed future growth,” he explained. “The due diligence we carry out before investing in new markets follows a rigorous process that eventually rules out many opportunities. We expect these sectors to offer a number of investment opportunities in the future.”

The firm’s interest in diversifying its portfolio, which includes the listed John Laing Environmental Assets fund and John Laing Infrastructure Fund, comes after the second half of 2016 saw the group make its first investment in US renewables and its debut in Europe’s offshore wind market. While the company said the latter offers “strong potential”, its current pipeline does not include any further moves in the sector.

John Laing also noted it has “deferred” work on Turkey’s PPP programme following last summer’s coup attempt and its aftermath. It is expecting new opportunities to arise in the UK PPP market but is waiting for these to become more defined.

The group is expecting significant PPP activity in European countries in 2017 and is particularly enthusiastic about Germany, Norway and the Czech Republic. It also highlighted the Australian renewable energy market as one offering substantial growth potential in the coming years.

The firm saw a 14.3 percent increase in its net asset value last year to £1 billion ($1.2 billion; €1.1 billion), primarily due to the effects of foreign exchange movements following Brexit.