Quoted UK Infrastructure and Renewable Energy ‒ A year of trials and tribulations
Only Cordiant and Pantheon buck the trend...For the remaining 29 quoted Infrastructure Investment Companies (IICs) and the Renewable Energy Infrastructure Funds (REIFs), 2024 was a dire year ‒ as was 2023. NAV discounts widened appreciably, while some REIFs, in particular, really struggled.
During 2024, there were several “Continuation/Discontinuation Votes”, which saw some funds enter Managed Wind Down. Furthermore, there were no major sector fund-raises during the year; instead, share buybacks prevailed. And, there were no sector IPOs ‒ the last was back in 2021.
Nevertheless, most funds avoided nominal dividend cuts, while both Greencoat UK Wind and 3i Infrastructure raised their payments to shareholders substantially.
Undoubtedly, at the smaller end of the sector, real challenges remain, with equity markets seemingly closed to most sector participants.
Clearly, sector investors will be hoping that 2025 brings some good news ‒ on the back of the high yields currently prevailing ‒ and enables the wide NAV discounts to be narrowed.
3i Infrastructure is an investment company. Co. invests in infrastructure businesses and assets. Co.'s portfolio consisted of Elenia, an electricity distribution; Anglian Water Group, a water utility; Oystercatcher, an oil product storage terminal; Cross London Trains, a passenger train fleet; ESVAGT, an emergency rescue and response vessels and wind farm maintenance support vessel; Infinis, a generator of electricity from landfill gas; TCR, ground support equipment in airport; Wireless Infrastructure Group, communication tower; and Valorem, an onshore wind developer. Co. invests in various sectors, such as utilities, transportation/logistics, natural resources/energy, and communications.
Bilfinger Berger Global Infrastructure SICAV is a closed-ended, diversified investment company. Co.'s primary investment objective is to invest in a diversified portfolio of operational (or near operational) Public Private Partnership / Private Finance Initiative infrastructure assets or similar assets.
Bluefield Solar Income Fund is a closed-ended investment company. Co. invests in a portfolio of solar energy assets, each located within the U.K., with a focus on utility scale assets and portfolios on greenfield, industrial and/or commercial sites.
GCP Infrastructure Investments is a closed-ended investment company. Co. is focused primarily on investments in U.K. infrastructure debt. Co. invests in a partially inflation-protected portfolio of loans and assets, primarily in the renewable energy, social housing and private finance initiative sectors. Gravis Capital Management Limited is the appointed investment adviser and alternative investment fund manager to Co. The investment adviser has advised on debt structures in a variety of infrastructure sectors, including a variety of renewable energy sectors, healthcare, education, court buildings, specialized offices, registered social landlord accommodation and transport.
Greencoat UK Wind is an investment trust company that engaged in the renewable infrastructure fund, with an objective to provide investors with an annual dividend that increases in line with Retail Price Index inflation. Co. invests in unlevered operating the U.K. wind farms predominantly with a capacity of over 10MW, which sell the power produced and associated green benefits to creditworthy the U.K. offtakers under route-to market power purchase agreements. Co.'s investment portfolio is managed by Greencoat Capital LLP, which acts as its Investment Manager. As of Dec 31 2017, the net asset value of Co.'s total investments was £1.41 billion.
NextEnergy Solar Fund is a closed-ended investment company. Co.'s investment objectives are to provide investors with a dividend that increases in line with Retail Price Index over the long term. Co. invests in solar Photovoltaic plants located in the U.K. Co. is managed by NextEnergy Capital IM Limited. As of Mar 31 2017, Co. had total investments at fair value of £415.9 million.
Sequoia Economic Infrastructure Income Fund is a closed-ended investment company. Co. invests in a diversified portfolio of senior and subordinated economic infrastructure debt investments through its subsidiary Sequoia IDF Asset Holdings S.A. Co.'s investment objective is to provide investors with regular, sustained, long term distributions and capital appreciation from a diversified portfolio of senior and subordinated economic infrastructure debt investments. Co. is managed by International Fund Management Limited.
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