GCP Infrastructure – Delivering on its promises
- 20 February 2026
- GCP Infrastructure : GCP
- James Carthew
Delivering on its promises
GCP Infrastructure (GCP) is now over 15 years old. Investors who subscribed at IPO have already received all of their investment back in dividends alone.
While the NAV has been fairly stable, factoring in both income and capital from launch to the end of December 2025, GCP generated a total NAV return of 187%. Despite this long-term record, GCP’s shares have traded on a wide – and we feel unjustified – discount for several years. That boosts its dividend yield, which is currently 9.1%.
For two years, GCP has been releasing capital from its portfolio to reduce leverage, fund share buybacks, and improve the overall risk/reward profile of the portfolio. The recently announced exchange, which, if completed, will result in a repayment of £47.5m of loans secured against a portfolio of social housing properties, would take the total to about £128m, well on the way to its £150m target. GCP has repaid almost all of its debt, with the small remaining balance expected to be cleared following this repayment. Alongside this, the company has completed share buybacks totalling £24m of its £50m target. In addition, its investment adviser Gravis Capital Management (Gravis) has identified a £200m pipeline of further potential disposals.
Public-sector-backed, long-term cashflows
GCP aims to provide shareholders with sustained, long-term distributions and to preserve capital by generating exposure primarily to UK infrastructure debt or similar assets with predictable long-term cashflows.
Share price and premium/(discount)
Time period 31/01/2021 to 18/02/2026
Performance over 5 years
Time period 31/01/2021 to 31/01/2026
| 12 months ended | Share price TR (%) | NAV total return (%) | Earnings1 per share (pence) | Adjusted2 EPS (pence) | Dividend per share (pence) |
|---|---|---|---|---|---|
| 30/09/2021 | (7.9) | 7.2 | 7.08 | 7.90 | 7.0 |
| 30/09/2022 | 3.8 | 15.8 | 15.88 | 8.33 | 7.0 |
| 30/09/2023 | (25.2) | 3.7 | 3.50 | 8.58 | 7.0 |
| 30/09/2024 | 28.2 | 2.2 | 2.25 | 7.09 | 7.0 |
| 30/09/2025 | 0.9 | 3.1 | 2.15 | 6.73 | 7.0 |
Source: Bloomberg, GCP, Marten & Co. Note 1) EPS figures taken from 30 September each year. Note 2) As disclosed by the company.
Company profile – regular, sustainable, long-term income
More information is available on the trust’s website
GCP Infrastructure Investments Limited (GCP) is a Jersey-incorporated, closed-ended investment company whose shares are traded on the main market of the London Stock Exchange. GCP aims to generate a regular, sustainable, long-term income while preserving investors’ capital. The company’s income is derived from loaning money predominantly at fixed rates to entities which derive their revenue – or a substantial portion of it – from UK public-sector-backed cashflows. Wherever it can, it tries to secure an element of inflation protection.
GCP’s portfolio is diversified across a range of different infrastructure subsectors. It includes exposure to renewable energy projects (where revenue is partly subsidy and partly linked to sales of power), PFI/PPP-type assets (whose revenue is predominantly based on the availability of the asset), and specialist supported social housing (where local authorities are renting specially-adapted residential accommodation for tenants with special needs).
The AIFM and investment adviser is Gravis Capital Management Limited (Gravis). Philip Kent is its CEO and the lead fund adviser to GCP.
The board is targeting a full-year dividend of 7.0p per share for the financial year ended 30 September 2026.
In December 2023, GCP announced a new capital allocation policy which prioritised a reduction in its leverage, improved risk-adjusted returns from the portfolio, and return of capital to shareholders through the use of share buybacks.
Opportunities to provide an attractive dividend yield from a relatively low risk portfolio
As the capital allocation policy progresses, GCP’s core proposition of providing an attractive dividend yield from a relatively low-risk portfolio should shine through.
Annualised downward revaluations of just 0.51%
The infrastructure sector is characterised by a relatively low economic sensitivity. It supports essential services, and this helps underpin predictable and reliable cash flows, which tend to be less correlated with wider markets. For GCP, which targets investments in debt rather than project equity, ranking higher up in the capital structure provides additional comfort. The company’s track record since launch reflects that, with annualised downward revaluations of GCP’s investments running at just 0.51% since launch, and we believe that this would have been lower still had ultra-low interest rate policies not distorted markets. GCP’s loans are backed by assets, which benefits its recovery rate in the event of default.
In the environment of higher interest rates that we find ourselves in, it is easier for GCP to achieve its target rate of return while managing down its risk profile. Under the capital allocation policy, the investment adviser has set out to improve the risk profile – by rebalancing the portfolio to be more debt-like and reducing the volatility in the valuation, while targeting exits in the supported living sector and reducing equity-like exposures – rather than chase ever-higher returns.
For the moment, the emphasis is on driving down GCP’s discount. At the current discount, buying back stock offers a better risk-adjusted return than making new investments. However, there should come a point where the balance shifts. The opportunity set available to GCP is considerable and, when the numbers add up, we would expect that most investors would be keen to see GCP make new investments.
It is clear that cash-strapped governments need to look to the private sector to help fund replacements for crumbling post-war infrastructure, achieve decarbonisation goals, and digitalise economies. GCP can and should have a role to play in this.
Market backdrop
Interest rates
As Figure 1 shows, UK interest rates have fallen across the board since the end of July 2025 (around the time that we last published on GCP). Concerns about UK government finances appear to have been allayed by the recent budget. Against this backdrop, the Bank of England cut its base rate to 3.75% in December 2025, and we could see a further reduction in a matter of weeks as four of nine members of its Monetary Policy Committee voted in favour of cutting the base rate to 3.5% at the last meeting on 4 February 2026.
Figure 1: Shift in UK yield curve since end July 2025
Source: Bloomberg
For GCP, the more important shift is in the medium-to-long-term interest rates. At the end of December 2025, the average life of the portfolio was 11 years and the weighted average yield on the portfolio was 8%.
Inflation
UK inflation has moderated, but in recent months CPI seems to have settled in the 3.0%–4.0% range. A number of economists are predicting that the rate will fall sharply over coming months, which would strengthen the case for further interest rate cuts. At the end of December 2025, 49% of GCP’s portfolio had some form of inflation protection. This provides a degree of cushioning if inflation does prove stickier than expected. Figure 14 on page 10 shows the estimated sensitivity of GCP’s NAV to changes in inflation assumptions.
Figure 2: UK inflation – CPI and RPI
Source: ONS, Marten & Co
UK infrastructure plan
In June 2025, the UK government published its 10-year strategy for economic, housing, and social infrastructure. The plan outlined £725bn of government funding for infrastructure over the next decade, but also promised to create opportunities to unlock other types of new investment into infrastructure, to maximise public investment. Whilst the numbers and the timeframes can be taken with a pinch of salt, it does underscore the need for UK infrastructure investment, and the inability of the government to fund this off its own balance sheet.
Cost disclosures
The issue of misleading cost disclosure, which had been a factor in the emergence of GCP’s discount, has been partially resolved. The FCA’s new rules on consumer composite investments should prove less of a deterrent for investors evaluating investment companies. However, there is still a need to reform MiFID regulations as wealth managers, for example, are still obliged to give their customers misleading information. The FCA is reviewing the situation. Gravis was heavily involved in the campaign for cost disclosure reform.
Asset allocation
As of 31 December 2025, there were 47 investments in GCP’s portfolio, down from 48 at the end of June 2025. The average annualised portfolio yield over the financial year was 8.0% (7.9%), and the portfolio had a weighted average life of 11 years (unchanged).
Figure 3: Split of the portfolio at 31 December 2025
Source: GCP Infrastructure Investments
Since end June 2025, the exposure to PPP/PFI has risen by 2 percentage points, while biomass, gas peaking, hydro-electric, and supported living are all up by 1 percentage point. At the other end of the scale, Solar is down 3 percentage points, while onshore wind and anaerobic digestion are both down by 1 percentage point.
Figure 4: Sector allocation at 31 December 2025
Source: GCP Infrastructure Investments
Figure 5: Security allocation at 31 December 2025
Source: GCP Infrastructure Investments
Since the end of June 2025, GCP’s equity exposure has fallen further from 5% to 4% of the portfolio. This was one of the aims of the capital recycling programme, as was a plan to reduce the exposure to social housing, which will take a big step forward with the recently announced exchange of contracts.
Figure 6: GCP sources of income as at 31 December 2025
Source: GCP Infrastructure Investments
Top 10 investments
Figure 7: GCP’s 10 largest investments as at 31 December 2025
| % of total assets 31/12/25 | Cashflow type | Project type | |
|---|---|---|---|
| Cardale PFI | 14.3 | Unitary charge | PFI/PPP (18 underlying assets) |
| Gravis Solar 1 | 9.2 | ROC/FiT | Commercial solar |
| GCP Programme Funding S14 | 5.7 | ROC/RHI/Merchant | Biomass |
| GCP Programme Funding S10 | 5.5 | Lease | Supported Living |
| GCP Bridge Holdings | 5.3 | ROC/PPA | PPE – Energy-from-waste / Energy efficiency |
| GCP Biomass 2 | 4.7 | ROC/PPA | Biomass |
| GCP Social Housing 1 B | 4.4 | Lease | Supported living |
| Gravis Asset Holdings H | 3.9 | ROC/RHI | Onshore wind |
| GCP Green Energy 1 | 3.7 | ROC/PPA | Commercial solar/onshore wind |
| GCP Rooftop Solar Finance | 3.6 | FiT | Rooftop solar |
Source: GCP Infrastructure Investment
We long been conscious that the list of GCP’s holdings offers limited insight into what the underlying characteristics of the portfolio. To address this, GCP recently made an investor portal available – Carapace – which allows registered users to explore the portfolio in greater depth.
We would encourage interested readers to request access to the site via GCP’s website.
Figure 8: Top 10 revenue counterparties as at 30 September 2025
| Firm | % of total portfolio |
|---|---|
| Ecotricity Limited | 10 |
| Npower Limited | 7 |
| Viridian Energy Supply | 7 |
| Statkraft Markets GmbH | 6 |
| Bespoke Supportive Tenancies Limited | 6 |
| Good Energy Limited | 4 |
| Gloucestershire County Council | 4 |
| Engie Power Limited | 4 |
| Power NI Energy Limited | 4 |
| Smartestenergy Limited | 3 |
Source: GCP Infrastructure Investments
Figure 9: Top 10 project service providers as at 30 September 2025
| Firm | % of total portfolio |
|---|---|
| WPO UK Services Limited | 19 |
| PSH Operations Limited | 13 |
| Solar Maintenance Services Limited | 10 |
| A Shade Greener Maintenance | 10 |
| Vestas Celtic Wind Technology Limited | 7 |
| Cobalt Energy Limited | 5 |
| Veolia ES (UK) Limited | 5 |
| Urbaser Limited | 4 |
| Gloucestershire County Council | 4 |
| Burmeister and Wain | 3 |
Source: GCP Infrastructure Investments
Recent investment activity
No new investments were made during GCP’s 2025 financial year, although the company did make £24.7m of follow-on investments to support existing borrowers. By the time of the publication of the annual report in mid-December, GCP had made an additional £1.7m of follow-on investments.
Figure 10: Outflows (investments) 12 months to end September 2025
Source: Gravis Capital Partners
Figure 11: Inflows (repayments) 12 months to end September 2025
Source: Gravis Capital Partners
Reflecting the progress made on the capital recycling programme, inflows comfortably exceeded outflows. Over FY25, GCP received £48.5m from scheduled repayments of principal and a further £27.7m of unscheduled prepayments of principal. After the period end and up to mid-December, GCP received an additional £4.4 of cash inflows.
The recent deal in supported housing
On 2 February 2026, GCP announced that certain borrowers had exchanged contracts for the disposal of properties that are leased to registered providers of supported social housing. The proceeds of such disposals, if completed, will repay £47.5m of loans and, allowing for deferred amounts, will generate day one cash proceeds of £43m.
The disposal was in line with the valuation of those loans in GCP’s end September 2025 NAV.
We understand that the loans being repaid include most of those that comprise most of GCP Programme Funding 1 Ltd Series 1, GCP Social Housing 1 Ltd D and two thirds of GCP Social Housing 1 Ltd B. About a third of the loans in that vehicle relate to accommodation leased to MySpace, which was not included in the sale.
We understand that further exits from this part of the portfolio are likely over the course of the rest of the year.
Capital recycling
The investment adviser has identified a substantial pipeline of potential disposals that will reshape the portfolio and free up capital to complete the capital recycling programme.
At 30 September 2025 (before the most recent transaction), the disposal pipeline included portfolios of 33 and 55 supported living assets, a large onshore wind farm, a portfolio of operational and ready-to-build solar assets, a portfolio of gas-to-grid anaerobic digestion plants, and the equity interest in a biomass plant. In addition, there is scope to refinance a portfolio of ground-mounted solar projects, as well as a biomass project.
If executed in full, the disposal programme would reduce the weighted average life of loans in the portfolio from 11 to eight years. However, it would also translate into an increase in the weighted average annualised yield on the portfolio from 8.0% to 8.3%.
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