GCP Infrastructure – Delivering on its promises
Conservative assumptions
Figure 12 summarises the key assumptions that underpin the cash flow forecasts for renewable assets in which the company is invested, and the range of assumptions that the investment adviser observes in the market. GCP’s investment adviser traditionally takes a conversative approach, with the chart highlighting alternative, more aggressive valuation assumptions that could be taken.
The net effect of this is that, were GCP to assume the most conservative assumptions in every category, the end-September NAV of 101.40p would have been reduced to 98.64p. By contrast, were GCP to assume the least conservative assumptions in each category, the NAV would have been 109.27p.
Figure 12: Valuation assumptions as at 30 September 2025
Source: GCP Infrastructure Investments
Sensitivities
The investment adviser also provides a sensitivity analysis for its forecast cash flows. Figures 13 and 14 show the impact of changes in power prices and changes in its base case inflation forecast.
The sensitivity to power prices has fallen once again (in the note we published in January 2025, a 10% fall in prices would have meant a 9.1p fall in the NAV, by August 2025, that figure was 4.7p, and now that figure is 4.0p.
Figure 13: Impact of change in forecast electricity prices
Source: GCP Infrastructure Investments
Figure 14: NAV impact associated with a movement in inflation
Source: GCP Infrastructure Investments
Performance
GCP continues to deliver steady progress in its NAV total return. As in past notes, we have compared GCP’s returns to those of sterling corporate bonds which have some similar risk characteristics to GCP’s investment approach. As Figure 16 shows, GCP has delivered returns well-ahead of sterling corporate bonds over the past five years.
Figure 15: GCP NAV total return
Source: Bloomberg, Marten & Co
Figure 16: GCP NAV total return performance relative to sterling corporate bond performance
Source: Bloomberg, Marten & Co
For shareholders, the main problem has been the widening of the discount that occurred over 2022. Fortunately, more recently the discount has been narrowing again to the benefit of shareholder returns.
Figure 17: Cumulative total return performance over periods ending 31 December 2025
| 3 months (%) | 6 months(%) | 1 year(%) | 3 years (%) | 5 years (%) | |
|---|---|---|---|---|---|
| GCP share price | 5.2 | 6.0 | 15.5 | (4.0) | 2.5 |
| GCP NAV | 0.0 | 1.0 | 1.5 | 6.9 | 34.9 |
| Sterling corporate bonds | 2.8 | 3.6 | 7.1 | 19.6 | (6.6) |
Source: Bloomberg, Marten & Co
Drivers of recent performance
Financial year ended 30 September 2025
Figures 18 and 19 show the factors affecting GCP’s performance over the 12-month period ended 30 September 2025.
Figure 18: Cumulative total return performance over periods ending 31 December 2025
| Impact (£m) | Impact (pence) | |
|---|---|---|
| Inflation forecast | 6.8 | 0.81 |
| O&M budget update | 3.1 | 0.37 |
| Ofgem audits resolved | 2.5 | 0.30 |
| Other | 3.7 | 0.44 |
| Total | 16.1 | 1.92 |
Source: GCP Infrastructure Investments
The largest positive contributor to the NAV return came from an upward revision of inflation forecasts. Cost savings within GCP’s operations and maintenance budget also helped. In addition, a longstanding issue relating to subsidy entitlements for certain solar projects – which had been under review by Ofgem – has been resolved.
Figure 19: Negative factors affecting FY2025 performance
| Impact (£m) | Impact (pence) | |
|---|---|---|
| Revaluation of AD portfolio | (38.1) | (4.55) |
| Lower than forecast renewable generation | (15.0) | (1.79) |
| Discount rates | (6.7) | (0.80) |
| Reassessment of likely curtailment of output at Northern Irish wind assets | (3.4) | (0.41) |
| Power price move | (2.0) | (0.24) |
| Other | (1.1) | (0.13) |
| Total | (66.3) | (7.92) |
Source: GCP Infrastructure Investments
On the downside, there was a hit to the NAV that resulted from a reduction in the assumed long-term availability forecast of a portfolio of anaerobic digestion plants.
Although the investment adviser has been working to reduce the portfolio’s sensitivity to power prices and output, lower than forecast generation was an issue over this period. Also, even though gilt yields have been trending down recently, back in Q4 2024 they were rising. That would have been a factor in the decision to increase discount rates.
Factors affecting GCP’s Q4 2025 performance
Over Q4 2025, the most significant influence on the NAV was a further reduction in power price forecasts, which took 0.5p off the NAV. This is an issue that has plagued renewable energy companies and whilst disappointing to see, it is encouraging that the hit to GCP’s NAV was relatively minor. Actual generation was a positive contributor to the NAV. The only other meaningful negative (-0.53p) was the UK government’s puzzling decision to impose changes to the way that subsidies are calculated by replacing RPI with CPI in the calculation. This occurred despite overwhelming opposition, and we fear it will raise the cost of financing the UK’s infrastructure programme as investors factor in an additional risk premium to contracts.
Up-to-date information on GCP and its peers is available on the QuotedData website
Peer group
GCP sits within the AIC’s infrastructure sector. Within this peer group its closest comparator is Sequoia Economic Infrastructure, which – like GCP – invests primarily in infrastructure debt, but using a much broader definition of what constitutes infrastructure. As we have done in previous notes, we have included some information on the renewable energy sector as GCP’s underlying asset exposures are biased to this area.
Figure 20: GCP peer group comparisons
| Discount (%) | Yield (%) | Market cap (£m) | NAV 1-year (%) | NAV 3-years (%) | NAV 5 years (%) | |
|---|---|---|---|---|---|---|
| GCP | (23.0) | 9.1 | 643 | 2.1 | 2.5 | 6.3 |
| Sequoia Economic Infrastructure | (11.9) | 8.4 | 1,224 | 5.6 | 7.1 | 5.1 |
| Median of other infrastructure peers | (18.5) | 3.8 | 804 | 12.1 | 8.0 | 8.3 |
| Median of renewable energy sector | (40.1) | 11.3 | 293 | (2.5) | (2.1) | 5.2 |
Source: QuotedData website as at 19 February 2026
GCP’s five-year returns look reasonable versus its immediate and renewable energy peers and the relative resilience of its debt portfolio versus the equity portfolios of companies in the renewable energy sector is apparent. Sequoia has less renewable exposure than GCP.
Quarterly dividend
Dividends are declared and paid quarterly. Shareholders are able to elect to take their dividend as scrip (in shares rather than cash). For its new financial year, GCP’s target dividend remains stable at 7.0p in line with its previous four financial years.
Premium/(discount)
Over the 12 months ended 31 December 2025, GCP’s shares have traded on an average discount of 28.1%, and as wide as 35.1% and as narrow as 21.3%. As of publishing, the discount stood at 23.0%.
The widening of the discount was initially triggered by the sharp rise in interest rates aimed at choking off inflation. This was compounded by selling from funds of funds and wealth managers, prompted by the misleading cost disclosure rules we discussed on page 5. Since then, progress with disposals and buybacks under the capital allocation programme should have contributed to a reduction in the discount as should cuts to interest rates over the last few quarters and the – albeit partial – resolution to the cost disclosure issue. However, we do not believe that these positives are yet fully reflected in the discount, which should continue to narrow from here.
In pursuit of its capital recycling programme, GCP bought back £22.8m worth of shares over the course of its financial year ended 30 September 2025. Since then, well over 3m more shares have been repurchased. In total, since the programme was announced, 34,610,234 shares have been repurchased.
Figure 21: GCP discount over five years ending 31 January 2026
Source: Bloomberg, Marten & Co
Structure
Fees and costs
The investment adviser receives an investment advisory fee of 0.9% a year of the NAV net of cash. This fee is calculated and payable quarterly in arrears. There is no performance fee. The investment adviser is also entitled to an arrangement fee of up to 1% (at its discretion) of the cost of each new investment made by GCP. Gravis will charge the arrangement fee to borrowers rather than to the company. To the extent that any arrangement fee negotiated by the investment adviser with a borrower exceeds 1%, the benefit of any such excess shall be paid to the company. The investment adviser also receives a fee of £70,000 (subject to RPI adjustments) a year for acting as AIFM, which was £92,000 for the 2025 financial year.
The investment advisory agreement may be terminated by either party on 24 months’ written notice.
Capital structure and life
As of 18 February 2026, GCP has 884,797,669 ordinary shares outstanding, of which 51,595,253 are held in treasury. The number of shares with voting rights is 833,202,416.
GCP is an evergreen company with no fixed life and no regular continuation vote. The company’s financial year end is 30 September and AGMs are held in February.
Gearing
Structural gearing of investments is permitted up to a maximum of 20% of NAV immediately following drawdown of the relevant debt. However, GCP has been targeting debt reduction, and at the end of December 2025 it had net gearing of just 1.2%.
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