Utility
Equity

A Comprehensive Approach to Utility Investing

Strategy Objective

The strategy seeks total return, through a combination of capital appreciation and current income.
 

Approach

  • Invests globally in utility (electric, gas, and/or water), energy infrastructure, and telecommunication infrastructure companies
  • Seeks to exploit what we believe to be are two main market anomalies – the information and investment horizon gaps
  • Identify companies that we believe are currently undervalued relative to their future cash-flow generation potential, based on their long-term normalized growth rates
  • The team focuses on the often overlooked, longer-term operating dynamics of each company seeking to identify stocks that are currently trading below sector/industry norms, trading at a discount to the “sum of the parts” valuation, and/or temporarily performing below historical trends
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Differentiating Characteristics

Our Definition of Utilities is Disciplined, yet Not Driven by an Index

  • We invest globally in traditional utility companies (electric, gas, and/or water), but also energy infrastructure, and telecommunication infrastructure resulting in a comprehensive opportunity

Diversified, yet Disciplined Portfolio Construction

  • Our approach is designed to provide the potential for higher upside capture, compared to more defensive utility strategies, while still affording the potential to mitigate downside capture

In-Depth Specialization & Experience across the Utilities Sector

  • Jennison has been a pioneer in utility investing with a history dating back to the 1970’s
  • We believe our experience investing across the entire energy value chain and our deep understanding of the infrastructure sector can provide us a competitive advantage in building utility portfolios

Key Characteristics

Benchmark: S&P 500 Utilities Index
Number of Holdings: Typically 60 – 75
Strategy Inception: July 1994
Market Cap: All-Cap
Turnover: 30 – 45% under normal market conditions

 
Capital at Risk: Please remember that there are inherent risks involved with investing in the markets, and your investments may be worth more or less than your initial investment upon redemption. There is no guarantee that the investment managers’ objectives will be achieved. Professional money management is not suitable for all investors.

Investment Team

Our Utility team is a part of Jennison’s Income & Infrastructure investment suite which also includes our Equity Income, Global Infrastructure, MLP, and Rising Dividend strategies.

Jennison has been a pioneer in utility investing with a history dating back to the 1970’s and has been managing one of the largest utility strategies in the US since the 1990’s. Our investment teams’ extensive experience within the utility and telecommunication sectors, which have historically been two of the higher dividend-yielding sectors*, is complemented by our MLP and midstream energy infrastructure experience.

*As of December 31, 2015

 

Meet the Team

 
This website is intended for Institutional and Professional Investors only.

Please remember that there are inherent risks involved with investing in the markets, and your investments may be worth more or less than your initial investment upon redemption. There is no guarantee that the investment managers’ objectives will be achieved. Professional money management is not suitable for all investors.

Additional considerations:
This web site is not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services.The does not constitute investment advice and should not be used as the basis for any investment decision. There is no assurance that the strategy objectives as discussed will be met. Further, there is no assurance that any strategies, methods, sectors, or any investment programs herein were or will prove to be profitable, or that any investment recommendations or decisions we make in the future will be profitable for any investor or client.These materials do not purport to provide any legal, tax or accounting advice.

The risks associated with investing include but are not limited to: derivative securities, which may carry market, credit, and liquidity risks; short sales, which involve costs and the risk of potentially unlimited losses; leveraging, which may magnify losses; high yield (“junk”) bonds, which are subject to greater market risks; small/mid cap stocks which may be subject to more erratic market movements than large cap stocks; foreign securities, which are subject to currency fluctuation and political uncertainty; real estate, which poses certain risks related to overall and specific economic conditions as well as risks related to individual property, credit and interest-rate fluctuations; and mortgage-backed securities, which are subject to prepayment and extension risks.

Thematic and concentrated portfolios may not be suitable for all investors. Such portfolios are non-diversified, so a loss resulting from a particular security will have greater impact on the portfolio’s return. Fixed income investments are subject to interest rate risk, and their value will decline as interest rates rise.

Your investment objectives, risk tolerance, and liquidity needs must be reviewed before suitable programs can be recommended. Asset allocation and diversification strategies do not assure a profit or protect against loss in declining markets. Investors should consult with their attorney, accountant, and/or tax professional for advice concerning their particular situation.

In the UK: The information contained herein is provided by PGIM, Inc., the principal asset management business of Prudential Financial, Inc. (PFI), Both Jennison, and PGIM are U.S. SEC registered investment advisers. Jennison is a wholly-owned subsidiary of PGIM, which is the principal asset management business of PFI, a company incorporated and with its principal place of business in the United States. PFI is not affiliated in any manner with Prudential plc, a company incorporated in the United Kingdom.

PGIM Limited registered office: Grand Buildings, 1-3 Strand, Trafalgar Square, London, WC2N 5HR is authorised and regulated by the Financial Conduct Authority of the United Kingdom (registration number 193418) and duly passported in various jurisdictions in the EEA. These materials are issued to persons who are professional clients or eligible counterparties for the purposes of the Financial Conduct Authority’s Conduct of Business Sourcebook.

In certain countries in Asia, information is presented by PGIM Singapore, a Singapore investment manager registered with and licensed by the Monetary Authority of Singapore.

In Japan, information is presented by PIMJ, registered investment adviser with the Japanese Financial Services Agency.

In South Korea, information is presented by PGIM, Inc., which is licensed to provide discretionary investment management services directly to South Korean investors.

In Hong Kong, information is presented by representatives of PGIM (Hong Kong) Limited, a regulated entity with the Securities and Futures Commission in Hong Kong to professional investors as defined in Part 1 of Schedule 1 of the Securities and Futures Ordinance.