GCP Infrastructure – Merger to unlock compelling value?
GCP Infrastructure Investments (GCP) has announced a potential three-way merger between it, GCP Asset Backed Income (GABI), and RM Infrastructure Income (RMII). As we explore in this note, the adviser believes that this has the potential to address some of the issues that may have given rise to GCP’s discount.Following a period of NAV growth through 2022, GCP’s half-yearly report for the six months ending 31 March 2023 and the recently published end-June NAV showed what looks like a period of consolidation for the fund, as falling energy prices and higher discount rates seem to have weighed on returns. GCP has moved to trade on a 34.3% discount and a 9.8% yield. Despite this, GCP’s assets have continued to grow, and the adviser believes the outlook for investors remains as promising as ever thanks to a broad range of thematic tailwinds.
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.
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