The infrastructure sector has been one of many within the wider alternatives space to suffer from wide discounts of late. However, with a more mature and diversified asset base, the damage has been less severe than in other sectors, such as renewable energy, and there have been some early signs of a sustained recovery in recent months. Here, we look at the ratings of the various trusts and the (fairly limited) measures they have taken to address their discounts.
HICL, the first listed infrastructure trust, was launched in March 2006, so the infrastructure sector now has a twenty-year record ...
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Sequoia Economic Infrastructure Income (ticker: SEQI) was launched in 2015 and has raised a total of £1.8bn in its IPO and over several subsequent fundraisings. SEQI provides loans for various types of infrastructure projects, typically for three to five years, having a roughly equal mix of fixed and floating rates. Its portfolio is diversified across various developed markets and by industry sector. This trust targets an IRR of 8 to 9% that should translate into shareholder returns of 7 to 8% a year after costs although its annualised NAV return from March 2015 to September 2023 was a little ...
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GCP Infrastructure Investments (ticker: GCP) was launched in 2010. Along with Sequoia Economic Infrastructure Income, it is one of two trusts in the AIC's Infrastructure sector that specialise in loans rather than equity holdings. GCP has built up an entirely UK-based portfolio valued at £1.1bn that can be split into renewables (65%), PFI/PPP (24%), and supported housing (11%) and it has a mixture of fixed-rate senior and subordinated loans with an average remaining term of 10 years. Half of its income has some form of inflation protection and its NAV is also sensitive to power price movements...
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