In particular, he looked forward to the elections of new governments in India and Brazil. He’d expected those elections would pave the way for economic reforms for both countries, and that those changes would offset the after-effects of “the taper tantrums of 2013.”

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But while India had a strong year, Brazil underperformed, says Langley, investment director and senior portfolio manager of RARE Infrastructure in Sydney, Australia. He manages the Renaissance Global Infrastructure Fund.

For its part, India elected a reformist government in 2014. And its market then surged by 30%.

New reforms have yet to be implemented, says Langley, but India’s “growth expectations are increasing, and its inflation expectations are decreasing. We expect 2015 will be another strong year for performance.”

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Brazil was a different story. After the country’s incumbent government returned to power, says Langley, its market dropped 3%, and “the economy went in a different direction from what we anticipated.”

Part of the reason, he adds, was a plane crash that occurred during the election campaign season, which resulted in the death of the opposition party’s leader. Since then, “Brazil has dealt with a corruption scandal and a crippling drought,” and there’s been a drop in consumer confidence.

Langley predicts, “Had the opposition party come into power, we [could] have had a much more business-friendly environment and, even with the drought, the market [could] have been up quite significantly.”

For Brazil to return to favour, he adds, “the market would need to see new policies coming from the existing government, and there would be need to be development of quite a large amount of the country’s infrastructure.”


Also, the region isn’t attracting much domestic or foreign infrastructure investment, says Langley, so “we need to look out for changes in the way the government interacts with business[es] in Brazil.”

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On the bright side, the country does have a very proactive and pro-business finance minister. “We’re hoping that will turn some of the policies around this year. But we’re not expecting a lot in 2015, so maybe 2016 and beyond.”


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