The Telegraph spots an outlier in London’s investment trust space: M&G Credit Income (MGCI). Outlier, because such has been demand for the debt fund that it has actually been able to issue new shares; while The Times thinks investors could soon wake up to the opportunity that is value investing and cites Temple Bar’s (TMPL) outperformance of the wider market over the last 3 years as evidence.
By Frank Buhagiar
Questor – This trust offers a yield more than three times greater than inflation
M&G Credit Income Investment Trust (MGCI) is a fund in demand. Exhibit#1: MGCI issued 6.6m shares to satisfy demand over the past year. Exhibit#2: The shares trade at a 1% premium to net assets, making the debt fund something of an outlier in London’s investment company space. All the more impressive given The Telegraph’s Questor Column describes the current environment for a fund manager investing in debt as “tricky.” A nod to rising government borrowing costs around the world.
The fund’s attractive dividend yield of around 8.4%, “making it one of the higher yielding trusts in its peer group”, one reason cited for why the shares are in demand – the annual dividend is calculated at 4% plus Sonia (the sterling interest rate benchmark), meaning the dividend moves up and down with official interest rates. The high payout level is down to the fund’s relatively high exposure to private credit (53% of the portfolio as at the end of November 2024) – private credit securities tend to come with higher yields, compensation for having lower liquidity compared to public credit.
Risk management appears front and centre of the investment approach. 80% of the portfolio is invested in floating rate debt thereby making the fund less sensitive to interest rate risk compared to peers. Meanwhile, 70% of the portfolio is invested in investment grade debt. The portfolio is well diversified too – in all there are 130 holdings. According to Questor “Across its six-year life, the portfolio has experienced some defaults, but diversification and good credit analysis means the impact has been limited.” That does mean that “M&G Credit Income’s returns are respectable but not best in class” which leads Questor to “suspect that investors’ degree of enthusiasm for the trust will reflect their individual risk appetite. Questor says: hold”. Well they do say each to their own.
Tempus – Is it time to look at value investing? There may be good returns
As The Times’ Tempus points out “Value investing is not as popular as it once was among first-time retail investors, with most market newcomers seeking out racier returns in the world of artificial intelligence, fintech or even cryptocurrency rather than in unloved stocks.” But this could be changing as investors “wake up to the value opportunity in the UK market”. It’s an opportunity that value investor Temple Bar Investment Trust (TMPL) has been capitalising on – over the last three years the fund has generated a total return of +24%, easily beating the FTSE All-Share’s +17%.
The outperformance, testament to the fund managers Nick Purves and Ian Lance at Redwheel, who have been running the fund since October 2020, and the trust’s concentrated portfolio of 34 stocks, a third of which belong to the financial sector. Since Purves and Lance have been at the helm, TMPL has generated a net asset value total return of over +100%. That compares favourably to its UK equity income peers, which have delivered a weighted average return of around +86%.
The shares also offer a dividend yield of 3.6%, although that is slightly lower than the 4.3% sector average. And then there’s the discount which, according to Tempus, “suggests that the fund represents decent value for a prospective investor. It currently stands at just over 8%, slightly wider than recent history and compared with an average discount of 4.9% among rival funds. Advice Buy.” The value investor a value play itself, it seems.
The Results Round-Up: The week’s investment trust results
The Saba Saga reaches the Weekly Round-up. 2 of the 7 targeted by the activist reporting impressive numbers: Baillie Gifford US Growth (USA), +29.4% NAV return; Edinburgh Worldwide (EWI), NAV up +12.8% for the year and up +13.3% between 31 Oct and 31 Dec 2024 alone. Elsewhere, CC Japan Income & Growth (CCJI) and Invesco Asia (IAT) post NAV total returns of +16.1% and +6.3% respectively.
By Frank Buhagiar
Edinburgh Worldwide (EWI) needs shareholders to vote
EWI put out what could be its last set of annual results as an investor in global smaller companies – unless shareholders turn out in force to reject activist investor Saba Capital’s proposals at the upcoming general meeting on 14 February – Saba proposing to replace the Board with its own appointees, appoint itself manager and then switch to a strategy centred on investing in other investment trusts. All a far cry from what Chairman Jonathan Simpson-Dent describes as EWI’s “unique portfolio of publicly traded and private businesses operating at frontiers of technological innovation and transformation. The Company is a global smaller companies specialist aiming to generate long-term capital appreciation by early access to emerging businesses with significant disruptive growth potential.”
As for performance, during the year to 31 October 2024, net asset value (‘NAV’) per share increased +12.8% and the share price +26.1%. That compares to the S&P Global Small Cap Index’s +21.6% total return in sterling terms. Simpson-Dent believes this could be “the long-awaited start of Edinburgh Worldwide’s recovery.” And he could well be right as since period end share price and NAV are up +23.6% and +13.3% respectively between 31 October and 31 December 2024 – the S&P Global Small Cap Index by contrast is up just +2.5%.” The existing strategy coming good then. Thing is, the nascent recovery could well be stopped in its tracks if shareholders don’t show up and vote against Saba’s proposals at the upcoming general meeting. Share price hardly moved on the day – shareholders perhaps too busy instructing their brokers to vote against Saba’s proposals.
Numis: “The Board of Edinburgh Worldwide (EWI) has published a circular for a general meeting to be held 14 February requisitioned by activist investor Saba Capital, which currently holds 23.7% of EWI’s share capital, in which it urges shareholders to vote against all resolutions. Since 31 October, EWI’s NAV total return is 17.1% vs. 7.2% for the benchmark.”
JPMorgan: “EWI’s main argument in its defence is that its strategy is a unique one that has a good long-term record. But while it can point to a 125.3% NAV TR since 31/12/14 (8.5% pa) to 16/1/25, with 147.7% TSR (9.5% pa) over the same period, both have lagged behind the benchmark’s 163.4% (10.1% pa). That said, the unquoted portfolio makes a true comparison with a fully quoted benchmark more challenging. Even though EWI has underperformed, the mandate remains more interesting, in our view, than Saba’s potential offering, but given the performance difficulties over recent years some shareholders may not give EWI the benefit of the doubt. We estimate that with no votes from platforms, EWI would need to muster support of around 62% of its remaining shareholder base of ~38% to defeat Saba, assuming no further increase in Saba’s stake.”
Baillie Gifford US Growth (USA) posts +29.4% NAV return but will it be enough to keep Saba at bay?
USA reported an eye-catching +29.4% NAV return over the latest half-year period, almost double the S&P 500’s +15.3% total return in sterling terms. But as the Half-year Report notes “despite this extremely strong performance, Saba (Capital) has sought to introduce self-serving and destructive proposals to remove the independent Board and try to assume control of the Company.” Because of this “The Company and the strong growth potential shown in today’s results is directly under threat in a vote where every vote will count. We therefore reiterate urging all shareholders to VOTE AGAINST Saba’s proposals – it’s critical they do not miss the opportunity to save their investment from an uncertain and potentially destructive trajectory.”
For those thinking one impressive half-year performance does not a summer make, the longer-term performance record stacks up too: since launch on 23 March 2018 to 30 November 2024, the NAV return stands at +186.1%, pretty much in line with S&P 500’s +190.5% in sterling terms. No wonder Chair Tom Burnet doesn’t hold back in his statement “Saba is cynically counting on other shareholders not voting their shares to give them the best chance of taking effective control of the Company. Therefore, it is vital that shareholders vote on the Requisitioned Resolutions no later than 12 noon on 30 January 2025 (platform voting deadlines will be earlier) as the future of their investment depends on it.” A rallying cry from the Chairman and a rally in the share price on the day of the results too – up 4.5p to 262p.
Numis: “In the interim results, the current Board repeats its call to shareholders to vote against the resolutions, a view we echo. It has undoubtedly been a difficult time since the peak of the 2021 euphoria around tech companies, but USA’s record from launch remains good, with NAV total returns of 197%, marginally behind the 202% for the S&P 500, which has been a difficult index to beat given the dominance of a few tech companies. Performance has picked up with NAV total returns of 40.0% vs 30.1% for the S&P 500 over the last year.”
Liberum: “Significant outperformance by the largest cadre of companies in the US has presented a headwind, yet the focus on idiosyncratic opportunities in exceptional companies has helped the managers generate outsized returns from select holdings, in-line with the stated investment process, and we think there remain significant further opportunities for significant upside from names within the portfolio. Recent returns have benefitted from a narrowing of the discount; whilst Saba have claimed that this is as a result solely of their buying, we note that discount narrowing also coincided with a pick-up in NAV relative returns.”
CC Japan Income & Growth’s (CCJI) beats the index and the drum
CCJI’s full year NAV total return came in at +16.1%, comfortably ahead of the Topix’s +13.4% (sterling). The outperformance no one-off either. The cumulative NAV total return since inception in 2015 to 31 October 2024 stood at +152.5%, easily beating the TOPIX’s +100.6%. Chair June Aitken thinks “This long-term track record of high absolute returns and outperformance of the Index attests to the Investment Manager’s skill in identifying companies paying income to shareholders whilst still offering strong growth potential.” Hard to argue with those numbers.
Good to see Aitken taking the opportunity to beat the drum for investment trusts in her statement “for a plethora of reasons, not least including high costs and lack of access across platforms, investing directly into Japanese equities is challenging for individual UK investors and we believe that investment trusts provide a low cost and effective means by which to do so. In a complex investment region like Japan, active management is needed to unlock the most attractive return profile.” Can’t argue with that either. Shares ended the day 1.5p higher at 191p.
Numis: “Outperformance has continued post period end with the NAV up 4.4% on a total return basis, vs a 3.0% return from the Topix, in sterling terms. We note the fund has a three-yearly continuation vote, with the next coming up at the AGM in March 2025.”
Invesco Asia’s (IAT) big ambitions
IAT’s +6.3% NAV total return for the half year couldn’t quite match the MSCI AC Asia ex Japan Index’s +8.6%. Share price total return fared better though, up +9.6%. Perhaps that’s down to shareholders getting excited about the company’s proposed combination with Asia Dragon (DGN) which is due to complete on 14 February 2025, Valentine’s Day of course – is there a romantic or two among those involved in the tie-up? Certainly Chairman Neil Rogan has big ambitions for the enlarged trust “Our aim is to make this the go-to Asian trust, trading on a premium rating, growing organically and also through further combinations.”
Who’s to say Rogan won’t get what he wants. After all, he has got his way in the past as “In previous Chairman’s Statements I lamented that not much had changed. Now everything seems to be changing” and goes on to cite Trump’s victory in the US election and his plans to impose tariffs and cut taxes. “Many have already defaulted to a pessimistic scenario or are waiting on the sidelines but there is a significant probability of a positive outcome. Even a muddling-through outcome could produce positive returns, especially given the relatively low starting valuations for many of Asia’s stockmarkets.” Here’s to just muddling through. Shares closed off 3p to 340p – market sitting on the sidelines until the DGN tie-up completes?
Winterflood: “Underperformance primarily driven by underweight position in Chinese Financials. As previously announced, the combination with Asia Dragon, whereby IAT will be the ongoing vehicle, has been approved by IAT shareholders and remains conditional upon, amongst other things, the passing of resolutions at GMs of DGN to be held on 4 and 13 February.”
Why Dividend Investing is the Ultimate Long-Term Strategy
When it comes to investing for the long term, dividend investing stands out as one of the most reliable and rewarding strategies out there. It’s not just about watching your portfolio grow over decades—it’s about getting paid to wait while it does. That’s why I love it. And here’s why I believe dividend investing is the king of long-term investing.
1. Dividends Are Real Cash in Your Pocket When a company pays a dividend, it’s literally handing you a portion of its profits. This isn’t some hypothetical future value or a “maybe someday” scenario—it’s cold, hard cash hitting your account. And you can do whatever you want with it: reinvest, pay bills, or treat yourself. Contrast that with growth stocks, where you’re banking on the hope that the price goes up. Dividends give you tangible returns right now, regardless of what the stock price is doing.
2. The Magic of Compounding Reinvesting dividends is where the real magic happens. Each dividend payment buys you more shares, which then earn more dividends, which buy even more shares. It’s like a financial snowball rolling downhill, getting bigger and bigger over time. This compounding effect is one of the most powerful forces in investing, and dividend stocks make it easy to harness. The longer you stick with it, the more impressive the results become.
3. Stability and Predictability Dividend-paying companies are often established, financially stable businesses with a history of profitability. They’re not swinging for the fences—they’re focused on consistent performance. That stability can provide peace of mind during market turbulence. Plus, many companies aim to increase their dividends every year, even during downturns. That means your income keeps growing, regardless of what’s happening in the broader market.
4. Built-In Discipline Dividend investing encourages a long-term mindset. When you’re focused on building a stream of passive income, you’re less likely to panic during market dips or chase the latest hype stock. It’s all about consistency and patience.
5. It’s a Hedge Against Inflation Over time, inflation eats away at the value of your money. But dividend stocks often provide a natural hedge. Companies that regularly grow their dividends typically do so at a rate that outpaces inflation, helping you maintain your purchasing power.
Bottom Line Dividend investing isn’t flashy, but that’s what makes it so effective. It rewards patience, discipline, and a long-term focus. Whether the market is up, down, or sideways, dividend-paying stocks keep working for you, providing steady income and compounding growth. If you’re looking for a strategy that stands the test of time, this is it. Start small, stay consistent, and watch as your dividendspatience, discipline, and a long-term focus snowball into something incredible over the years.
My investment plan as Trump moves fast and breaks things
The rules for investing do not change no matter how disruptive or unpredictable the president is Tom Stevenson.
Related Topics
Trump’s America,
Donald Trump,
Income investing,
Shares,
Funds
23 January 2025 10:00am GMT
It is impossible to guess Donald Trump’s next move – he probably doesn’t know himself Credit: Julia Demaree Nikhinson/AP
Donald Trump’s modus operandi is to move fast and break things. That’s not necessarily a bad thing. Some things need disrupting and unpredictability can keep us on our toes. On the evidence of the first few days of Trump 2.0, the next four years will be a wild ride.
But investors should not make the same mistake as they did in 2017. We may not know where the new president’s attention will alight next but we do know that he sees the stock market as a barometer of his success. It may not look like it at times, but when it comes to managing our money, we’re on the same side.
It’s sometimes said that markets hate uncertainty. That’s not true. Markets neither like nor dislike the chaos that can be created by mavericks such as Trump. They simply respond to it – often excessively – in both directions. The ups and downs of the market are the price investors pay for the long-run outperformance of shares. Volatility is another word for opportunity. Our mistake is to think it’s the same thing as risk.
Investing in a perpetual state of uncertainty is the investor’s lot. So how can we manage our way through the next four unpredictable years? Here’s my plan.
The first thing to realise is that second-guessing the president is a mug’s game. He probably doesn’t know himself what he’s going to say or do. So trying to anticipate any particular outcome is pointless. If we are not wrong, we will be right but at the wrong time, which is just as bad.
In the wake of the Normandy landings, Eisenhower admitted that the D-Day plans were largely worthless. But he went on to say that planning, however, had won the war. We may not be able to predict the details of what the next presidential term holds in store but we can prepare. The two are not the same thing.
Dwight D. Eisenhower knew that he could not predict the future but that he could be prepared Credit: Nato/Hulton Archive
Warren Buffett has a “too hard” box on his desk. We can learn from this the importance of accepting the limits of our knowledge. We are wise not to move outside the boundary of our circle of competence. In the context of Trump, that might mean not trying to guess whether tariffs will be inflationary or deflationary. The answer is plausibly both, perhaps inflationary for a while and then deflationary in due course.
It certainly means not having a view on whether the dollar will be stronger or weaker in the long run. It suggests not trying to understand what the markets are telling us. They don’t know either.
If we don’t know what’s going to happen, we have even less idea of when. Timing changes in the market is another fool’s errand for investors. Since the 1920s, the US stock market has returned around 12pc a year. But that actual return has probably only been delivered on a handful of occasions. The dispersion around this average is wide, with annual falls and rises of as much as 50pc.
What makes things even harder to predict is the concentration of returns. A handful of days’ exceptional performance is responsible for a big proportion of the overall return. Miss these and you will struggle to keep pace with the market. And it is very easy to miss the best days because they are very often adjacent to the worst ones and occur when the outlook is most unpromising. Good luck anticipating them.
The good news is that good or lucky timing is helpful but not essential. As I noted last week, when looking at lessons from the Covid years, time in the market is more important than timing the market. Even if you had invested just before the pandemic plunge, you are safely above water now, five years on.
The third part of my Trump plan is to understand what I need financially and when. It really matters whether you will need to access your savings in the next few years or not for another couple of decades. If, as I am, you are close to or at retirement age then the answer is probably a bit of both. I need a buffer so that, if the market takes a plunge, I can take it in my stride. While I’m still working, my salary covers that off.
But when I stop, I will want at least a couple of years’ living costs, maybe more, in highly liquid assets such as cash or short-term securities. That way I won’t do anything silly with the greater part of my savings that I don’t need to touch for years to come.
A fourth strategy to rebalance regularly, not frequently. Once I’m happy with my long-term asset allocation, I will periodically revert to it. That way, I will benefit from the market’s inefficiency. Shares are more volatile than either corporate earnings or GDP. Rebalancing allows me to top up on investments that have fallen behind and trim those that have become over-priced.
Humans run in packs and the temptation is to stick with what’s popular even as the investment case for doing so is fading. Rebalancing is a simple, mechanistic way of introducing discipline into our portfolios. We all invest better when guided by rules, not gut instinct.
Finally, I intend to play to my strengths. My retirement fund has an investment committee of one. I’m not mandated to hold anything that keeps me up at night. That means there’s only one person to blame, too. And whatever he does or says, that person is not Donald J Trump.
The small size of Downing Renewables & Infrastructure (DORE) has held the trust back and lost it its place on the Winterflood buy list.
The £140m trust has been replaced by sector behemoth 3i Infrastructure (3IN), which has a huge £2.9bn market cap and invests in ‘core-plus infrastructure assets’ across four ‘megatrends’: energy transition, digitalisation, renewing essential infrastructure, and demographic change.
The discount has widened substantially in the past year, from 8% at the start of 2024 to a current level of 17%, despite a pick-up in private deals.
Bird said the track record was ‘excellent’, despite the rising cost of capital, with the NAV increasing 85% over five years, versus 37% for the S&P Global Infrastructure index. Although, remarkably, the shares have only managed a 28% rise, giving rise to the discount.
She said managers Scott Moseley, Bernardo Sottomayor, and Rob Collins have ‘proven their ability to exploit value-accretive capex opportunities’.
Since 2016, the fund has achieved a 37% average uplift on the realisation of its assets, and this trend continued in 2024, with it receiving a binding offer for its 33% stake in renewable energy operator Valorem at a 15% uplift to the last valuation.
‘The fund’s track record of disposing assets at a premium… leads us to question the sustainability of the fund’s discount, particularly given the robustness of earnings growth within the portfolio, and the abundance of dry powder in private markets,’ said Bird.
Property
A ‘considerable rerating’ for Schroder Real Estate (SREI) saw it rotated off the buy list and replaced by Custodian Property Income (CREI), which is trading at a wider discount.
Shares in the portfolio are currently sitting at a 23.2% discount to NAV, making it more attractive to Bird than the Schroder trust, which is at a discount of 18.9%.
Custodian is now the largest diversified UK commercial property trust in the market with a market cap of £321m following a spate of corporate activity last year.
‘This, combined with the focus on smaller lot sizes, means the portfolio is well diversified, reducing asset- and tenant-specific risk,’ said Bird.
Targeting smaller properties also provides a ‘yield advantage’ given the assets are off the radar of most peers.
‘This supports Custodian’s attractive prospective dividend yield of at least 8.2%, which is fully covered by earnings, and the fund has increased its annual dividend each year since 2021, following a cut in response to the Covid pandemic,’ said Bird.
It has delivered a NAV increase of 16.6%, or 3.1% annualised, in total return terms over the five years to the end of September, outperforming the 1.2% annual return from the MSCI UK Property index. Bird believes the outperformance will continue given its asset management skills and sales at a premium to book value.
Supermarket Income (SUPR) was also added to the list as a ‘buy’ given its specialist exposure and ‘supportive fundamentals’.
The £823m trust buys up ‘omnichannel’ stores – which are used not just as grocery stores but also fulfilment hubs for online orders – meaning it ‘benefits from the structural trend of e-commerce growth’.
‘These supportive fundamentals ensure affordability of rents for the fund’s tenants, as well as driving market rental growth, particularly for omnichannel stores,’ said Bird.
The trust enjoys a 100% rent collection rate and a fully covered dividend, which has been increased every year since launch in 2017, helped by the fact that 80% of the rental contracts are inflation-linked.
‘Supermarket’s current discount of 24%… offers significant value relative to history,’ said Bird.
‘We think that there is scope for a rerating, given the stabilising underlying valuations, supported by a more benign interest rate environment, with the fund’s relatively large size… making it a likely beneficiary of an improvement in sentiment towards property as an asset class.’
NextEnergy Solar Fund -Well covered, growing, double-digit yield
16 January 2025
QuotedData
Investment Companies
Renewable energy infrastructure
NextEnergy Solar Fund : NESF
Matthew Read
1
Well covered, growing, double-digit yield
Despite having many attractive features, NextEnergy Solar Fund (NESF) has seen its share price derate significantly during the last two years (driven largely by macroeconomic headwinds, such as the impact of higher interest rates on income-producing assets, which has affected the whole renewable energy sector and has been a factor again very recently). A hefty and, in our view irrational, discount to net asset value (NAV) has opened up, bringing with it significant yield expansion – NESF now has the second-highest dividend y in the FTSE 350 – despite its dividend being 1.3x cash-covered during its financial year ended 31 March 2024 (FY2024), with a coverage target of 1.1x – 1.3x for the year ending 31 March 2025 (FY2025) on a higher target dividend.
NESF has been making progress with its capital recycling programme (a strategy that involves selling assets and reinvesting the proceeds into higher-returning opportunities) (see page 8), with the proceeds used to reduce debt and share repurchases that, at current discount to NAV levels, are very NAV-accretive. The final phase for 100MW of assets could prove transformational.
Income from solar-focused portfolio
NESF aims to provide its shareholders with attractive risk-adjusted returns, principally in the form of regular dividends, by investing in a diversified portfolio of primarily UK-based solar energy infrastructure and complementary energy storage assets. Since its initial public offering (IPO), NESF has paid £370m of ordinary dividends – roughly its market cap – highlighting its strength as a total return play.
At a glance
Share price and discount
There has been a clear impact on NESF’s discount, which has widened in response to rising interest rates. Recent figures have shown inflation, while much reduced over the last couple of years, to be more stubborn than was expected even in the middle of last year. This has, at the margin, extended the higher interest rates for longer narrative, which has weighed on the discounts of all of the renewable energy funds, NESF included – leaving them all close to or at long-term discount highs.
Time period 31 December 2019 to 15 January 2025
Source: Morningstar, Marten & Co
Performance over five years
The end-September NAV was 97.8p – down from 101.3p as at the end of June, 107.3p at end March 2024 and 107.7p as at end December 2023. On the positive side, time value, the sale of Whitecross, share buybacks and the revaluation of NextPower III added 7.7p, 0.6p, 0.2p and 0.1p respectively. NESF’s weighted average discount rate stands at 8.1%, having moved up by 0.1% for 31 March 2024 valuation.
Time period 31 December 2019 to 31 December 2024
Source: Morningstar, Marten & Co
Year ended
Share price total return (%)
NAV total return (%)
Earnings per share1 (pence)
Dividend per share (pence)
Cash dividend cover (x)
31/03/2021
4.9
7.2
6.32
7.05
1.1
31/03/2022
11.4
23.1
17.34
7.16
1.2
31/03/2023
8.2
7.2
7.55
7.52
1.4
31/03/2024
(25.1)
(1.4)
(1.42)
8.35
1.3
31/03/2025
8.432
1.1-1.33
Source: Morningstar, Marten & Co. Note 1) Fully diluted. 2) Target dividend for FY2025. 3) Forecast cash coverage of target dividend as per the company’s announcement on 15 May 2024.
Portfolio update
Spanish and Portuguese co-investments energised
NESF has invested $50m in NextPower III ESG – a private solar infrastructure fund that owns international solar assets – that targets gross IRR between 13 and 15% on its investments. This is significantly above the level that UK solar funds are offering.
Shortly after we last published, NESF announced that its first two international solar co-investments, in which it invested alongside NextPower III ESG, had been energised. The assets are a 210MW solar project in Portugal (Santarém) and a 50MW solar asset in Cadiz, Spain (Agenor). NESF directly owns 13.6% of Santarém, 24.5% of Agenor, and 6.21% of NPIII ESG. Both assets have long-term PPAs (power purchase agreements) with Statkraft (Santarém’s PPA is the largest in Portugal’s history).
NESF’s manger highlights that the investment in NextPower III ESG gave NESF instant international diversification (the fund owns development-stage and operational assets in OECD countries), removing the need for NESF to have its own teams on the ground around the world. NextPower III ESG now has 102 operating assets, and the co-investment opportunities that NESF is able to access have the additional benefits of no management fee and no carried interest (carry). This is a differentiating factor for NESF versus its peers.
Since we last published, NESF has brought Camilla, its first standalone battery project, online. This is also the first project from its JV (joint venture) with Eelpower (the joint venture is 70% owned by NESF and 30% by EelPower). The 50-MW lithium-ion BESS (battery energy storage systems) asset, located in Edinburgh, is a one-hour battery, but has been pre-augmented for two hours so any upgrade to this should be plug-and-play. BESS assets have a very different revenue stack to solar, and this asset is very complimentary to NESF’s existing portfolio (BESS asset revenues are much volatile but can be much higher than those from solar, which is very stable). With its investment in NextPower III, NESF has exposure to 1.8GW of batteries. NESF’s manager highlights that it is the only renewable generator that has a utility scale battery online at present and that this is approaching its one-year operating anniversary in March 2025.
Capital recycling programme
Two out of five assets sold at a premium, adding 1.84pps to the NAV.
NESF has sold three of the five assets – Hatherden (November 2023), Whitecross (June 2024) and Staughton (November 2024) – earmarked for its capital recycling programme. These were all at premiums to their carrying values in the NAV, adding 2.76p cumulatively to the NAV. The three sales have raised £72.5m, of which £38.8m has been deployed to pay down NESF’s revolving credit facilities (RCFs), with c £4m used to repurchase shares (see page 8). However, NESF plans to look at alternative uses for the proceeds (for example, NAV-accretive investments) as the discount narrows.
Prior to the sale of all of these assets, NESF had added considerable value to both through its initiatives. For example, at Hatherden, approval for co-locating battery storage on the site was achieved, while an AR4 contract (Contracts for Difference contracts issued in the fourth round of the UK government’s CfD scheme) was secured for Whitecross. It adds that the latter had a very small snag list, so was very easy to sell.
NESF’s manager marketed the five assets as a portfolio but received more interest for the assets individually.
NESF’s manager says that it is taking its time with the disposal of the remaining two assets, which will be sold together in phase IV (the final phase), and exclusive negotiations are continuing with third-party bidders. It adds that it is seeing many pricing points in the market that are proving NESF’s NAV and there are superior valuations in the secondary market, versus the listed space, which in its view is being over-cautious.
Gearing (borrowing) – very attractive long-term preference shares
Paying down floating rate debt
As at end September 2024, NESF had £333.3m of debt of which £156.4m was long-term debt at fixed rates. It also had £198.4m of long-term preference shares. Total gearing was 48.2% of GAV including the preference shares (the limit is 50%) and 29.1% excluding them. The weighted average cost of debt (the total interest paid on a company’s debt, weighted by the size of each debt) instrument was 4.9% including the preference shares. As noted on page 4, the bulk of the proceeds of the capital recycling programme have been used to reduce NESF’s floating rate debt and, while this is the more expensive of NESF’s debt sources, the financing provided by the RCFs is still very competitive at SONIA + 1.2%–1.5%, reflecting NESF’s scale and creditworthiness. Both RCFs were refinanced in March and April this year on existing terms or better.
The preference shares remain an attractive source of finance in the current environment. While they have an indefinite life, they can be redeemed at par or converted to equity in 2036 and there could be significant upside from this (the managers describe it as a great form of non-amortising debt). NESF has been amortising long-term debt across the remaining life of its subsidiaries.
ESG, including sustainability and biodiversity
NESF is an Article 9 fund
As a reminder, NESF is an Article 9 fund under EU SFDR and Taxonomy (these are funds that specifically target sustainable objectives, such as environmental or social benefits, ensuring all their investments align with these goals). During the year ended 31 March 2024, its renewable generation had avoided the production of 279.3 ktCO2e. As we have previously highlighted, if the UK is to meet its net zero targets, much more needs to be done and NESF is keen to play its part in this. Its manager, NextEnergy Capital is the largest specialist solar manager, managing c$4.4bn of solar assets across its key OECD target markets, and aims to be at the forefront of developments in the space. Ross Grier (chief operating officer and head of UK investments at NextEnergy Capital) sits on the UK government’s Solar Taskforce, which was established to drive forward the actions needed to meet the government’s ambition to achieve clean power by 2030.
In June 2024, NESF published its third standalone sustainability and environmental, social and governance (ESG) report, which you can read here . NESF is keen to highlight its commitment to biodiversity and 81% of its portfolio assets have enhanced biodiversity measures. New habitat provisions comprise 27 bat boxes, 35 beehives, 78 bird boxes, 131 bug hotels, 32 hibernacula, 35 kestrel boxes, six owl boxes and 1,246 shrubs planted. NESF also provided community funding of £106k and donated £339k to the NextEnergy Foundation in cash and solar modules during the last financial year.
NESF published its first nature strategy report in November 2024. Key elements set out in the report include: an SBTN-aligned commitment (a commitment to reduce its negative impact on nature and contribute to its conservation) to prevent the material loss of natural ecosystems in direct operations and supply chains; a responsible land use target including nature implementation plans and dual land use regimes; a nature restoration target to restore natural ecosystems in the regions where NESF operates that need support; and updated nature-related risk management procedures for supply chain transparency and sustainability.
Performance
The end-September NAV was 97.8p – down from 101.3p as at the end of June, 107.3p at end March 2024 and 107.7p as at end December 2023. The main negative drivers between end-June and end-September were lower than budgeted generation due to lower-than-expected solar irradiation (-2.1p) and changes in power prices forecasts (-3.0p), with changes in short-term inflation costing an additional 0.1p. On the positive side, time value, the sale of Whitecross, share buybacks and the revaluation of NextPower III added 7.7p, 0.6p, 0.2p and 0.1p respectively.
The main negative drivers of the reduction between end-March and end-June were lower than budgeted for generation due to lower-than-expected solar irradiation (-1.7p) and changes in power prices forecasts (-1.2p), although changes in short-term inflation added 0.4p and the revaluation of NextPower III added 0.1p.
The main negative drivers of the reduction between end-December and end-March were changes in power prices forecasts (-2.7p – mainly due to lower commodity prices – particularly gas, which sets the marginal price of electricity – which was down by around 30-40%, influenced by above-average gas storage levels, milder weather across winter 2023/24 and sustained reductions in demand) and lower than budgeted for generation (-1.7p). Furthermore, although changes in short-term inflation added 0.3p, the revaluation of new assets added 1.6p and the revaluation of NextPower III added 0.7p.
Weighted average discount rate is 8.0%.
NESF did not make any changes to its discount rate assumptions for the quarters ended either 31 March 2024, 30 June 2024 or 30 September 2024. On 21 November 2024, NESF said that, for the quarter ended 30 September 2024, it had:
updated its inflation assumptions to reflect the latest-available third-party inflation data from HM Treasury Forecasts and long-term implied rates from the Bank of England for its UK assets; and
updated its power price forecasts capturing the latest-available third-party adviser long-term power curves.
NESF made the same statements for the previous two quarters, but, for the end-March valuation it also said that it had introduced new discount rate assumptions for its new 50MW operating energy storage asset, Camilla, which were in line with energy storage investment company peers. This increased NESF’s weighted average discount rate at 31 March 2024 slightly to 8.1% (31 December 2023: 8.0%), and it has remained at the level for the end-June and end-September valuations.
Potential upside in power curve assumptions
NESF uses a weighted average of the prices from three power forecasters in arriving at its own power price assumption. However, the manager believes that there is considerable upside that is not factored into these, for the following reasons:
the power price forecasts assume that cheap nuclear generation comes in on time and on-budget, which feels unrealistic given the history of large-scale infrastructure projects in the UK, particularly nuclear;
the assumptions do not fully capture the impact of the electric action of heating and roll-out of electric vehicles (EVs) in the manager’s view; and
there is now allowance for shocks to the system; for example, events such as the invasion of Ukraine, which overall tend to impact power prices positively from a generator’s perspective, factored in.
The manager says the situation is actually quite exciting and not as doom-and-gloom as the predictions suggest.
Dividend – second highest yield in the FTSE 350 Index
Figure 1: Dividend and cover
Source: NextEnergy Solar Fund. Note: 1) For financial years ended 31 March. 2) Cash dividend cover is pre scrip dividends.
NESF has 10 years history of paying a growing cash-covered dividend (dividends fully supported by cash income). For the year ended 31 March 2024, NESF paid a total dividend of 8.35p per share, which is a yield of 13.1% on its share price of 63.9p as at 15 January 2025. This is the second-highest yield in the FTSE 350 Index (the highest, Ithaca Energy, is artificially inflated and uncovered, as it is honouring a pre-IPO commitment to distribute US$400m of dividends for its 2023 financial year).
NESF has about 150m retail investors on its share register (around 26% of the total) and its board is acutely aware of the importance of income to these investors. NESF’s board sets a target for the year (usually announced in November as part of the interim accounts) which considers five-year forecasts of revenues and costs and allows for a sensible progression of the dividend over time that is both covered and sustainable. The target for the year 31 March 2025 is 8.43p per share, with forecast coverage of 1.1x-1.3x. The first and second quarterly interim dividends of 2.1p per share were paid on 30 September 2024 and 31 December 2024 respectively. Dividend cover for the first half was 1.5x.
Share price discount to NAV
The impact of the shifting sentiment on UK interest rates on NESF’s discount remains an obvious feature of Figure 2. Recent figures have shown inflation, while much reduced over the last couple of years, to be more stubborn than was expected even in the middle of last year. This has, at the margin, extended the higher interest rates for longer narrative, which has weighed on the discounts to NAV of all of the renewable energy funds, NESF included – leaving them all close to or at long-term discount highs.
As is illustrated in Figure 2, NESF’s discount remains very wide relative to its own history, offering significant narrowing potential, when interest rates retreat (something we started to see when inflation fell previously) and share repurchases continue. We also see potential for NAV growth through NESF’s capital recycling initiative. However, we still think that one of NESF’s key attractions is the size of its dividend yield, which is covered and supported by its attractive terms on its preference shares debt. We also see potential upside from the resolution of the cost disclosure issues that have plagued the sector, which should hopefully stem selling by professional investors.
Figure 2: NESF premium/(discount) to NAV
Figure 3: Share net issuance/repurchases
Source: Morningstar, Marten & Co
Source: NextEnergy Solar Fund, Marten & Co
£20m share buyback programme
NESF has been very active, repurchasing a modest amount of shares most days.
On 18 June 2024, NESF announced that it was launching a £20m share buyback programme designed to help narrow the discount to NAV. As is illustrated in Figure 3, since the programme’s launch, NESF has been very active in repurchasing its own shares, buying back 10.9m shares, equivalent to 1.8% of its issued share capital. These purchases are strongly NAV-accretive, given the prevailing discount. All of the repurchased shares are held in treasury.
Board update
Board completely refreshed as 10-year anniversary passed.
Since we last published, Caroline Chan has been appointed as chair of the management engagement committee and Jo Peacegood has been appointed as chair of the audit committee, following the retirement of Patrick Firth (who had served his full nine-year tenure). The chairwoman, Helen Mahy, was previously the chair of TRIG and Paul Le Page is ex-Bluefield. Both joined the board in 2023.
IMPORTANT INFORMATION
Marten & Co (which is authorised and regulated by the Financial Conduct Authority) was paid to produce this note on NextEnergy Solar Fund Limited.
This note is for information purposes only and is not intended to encourage the reader to deal in the security or securities mentioned within it. Marten & Co is not authorised to give advice to retail clients. The research does not have regard to the specific investment objectives financial situation and needs of any specific person who may receive it.
For most of 2024, financial conditions had finally started to turn favourably for infrastructure investors. Inflation had dropped sharply from the previous year, allowing the Bank of England to begin its easing cycle, while the new government’s ambitious plans for infrastructure development provided a renewed sense of optimism across the sector. These green shoots were evidenced by GCP’s annual results, which showed a total shareholder return of 28.4%, leading to a significant narrowing of its stubborn discount. Unfortunately, a negative reaction to the UK budget, and concerns around the inflationary impact of US tariffs, saw gilts retrace their highs, erasing some of these gains.
Despite this, we remain increasingly optimistic about GCP’s prospects as it continues to execute on its capital recycling programme. Coupled with improving market conditions, an impressive policy backdrop, and its long track record of capitalising on changing market dynamics, we believe there is a considerable opportunity for investors at current prices.
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.
12 months ended
Share price TR(%)
NAV total return (%)
Earnings1per share (pence)
Adjusted2 EPS (pence)
Dividend per share (pence)
30/09/2020
(2.0)
(0.22)
(0.08)
7.65
7.6
30/09//2021
(7.9)
7.2
7.08
7.90
7.0
30/09/2022
3.8
15.7
15.88
8.30
7.0
30/09/2023
(25.2)
3.6
3.50
8.58
7.0
30/09/2024
28.2
4.6
2.25
7.09
7.0
Source: Morningstar. Note 1) EPS figures taken from 30 September each year. Note 2) Adjusted earnings per share removes the impact of unrealised movements in fair value through profit and loss.
Company profile
Regular, sustainable, long-term income
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.
In practice, GCP is diversified across a range of different infrastructure sectors, although its focus has shifted more towards renewable energy infrastructure over the last few years. It has exposure to renewable energy projects (where revenue is part subsidy and part 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).
Annual results
GCP is trading dividend yield of 9.8%
On 12 December 2024, GCP published its annual results for the period to 30 September 2024. The company’s NAV total return was 2.2%, while the shareholder total return was 28.4% with the discount narrowing significantly to 25%, although this has since widened to 32.6% at the time of publication. Whilst GCP does not compare its returns with those of a benchmark index, the sterling corporate bond index is a useful comparison, and this returned 10.7% over the same period.
Dividends continued to run at an annualised pace of 7.0p per share, so that GCP is trading on a dividend yield of 9.8%. On the company’s adjusted earnings basis, calculated on interest accruals, dividend cover was 1.01 times (down from 1.23x at the end of the 30 September 2023). On a cash cover basis, this ratio is much higher. Profit was £19.5m (down from £30.9m). As we have covered in our previous research, the company’s financial performance continues to be driven by electricity prices and inflation, both of which have normalised from elevated levels, leading to a negative impact on profitability.
The company’s NAV total return was 2.2%, while the shareholder total return was 28.4%
Despite this, the company was still able to deliver a positive NAV total return for the year, while the 28% total shareholder return reflected the steadily improving market conditions and the ongoing implementation of the company’s capital recycling programme, which has remained the key focus for the manager over the past 12 months.
It should be noted that the shareholder return did benefit from timing factors, and some of these gains have been given back as economic uncertainty remains elevated. However, as we discuss in the market backdrop section, we remain increasingly positive on the outlook for the sector and the ability for GCP to capitalise on the growing investment opportunity, considering the significant structural changes occurring across the infrastructure sector.
As Figure 1 shows, positive contributions to NAV for the 2024 financial year were limited to tax computations and inflationary mechanics across the portfolio thanks to the company’s inflation linkages and protections. The otherwise-limited portfolio activity reflects the adviser’s focus on consolidation and its capital recycling policy as the company seeks to reposition itself for further growth.
Faling electricity prices had the largest impact on the downside
Falling electricity prices had the largest negative impact, although the vast majority of these occurred in the first half of the company’s financial year. As we have discussed in our previous research, it is important to note that the UK energy market is emerging from several years of unusually high volatility and prices remain well above historical averages. Over the last 24 months, this has provided strong cash flow generation for the GCP portfolio. More recently, prices in the UK have shown signs of stabilisation.
Notably, one of the main goals for the company’s current portfolio development is to reduce exposure to electricity price volatility, as evidenced by the recent sale of GCP’s interest in Blackcraig Wind Farm (discussed on page 7). In addition, where possible, the company continues to fix prices under power purchase agreements and hedge electricity prices.
Increases to discount rates have also weighed on the NAV, as have inflation adjustments, with inflation falling steadily over the course of 2024. Whilst inflation has not impacted operational performance, lower inflation projections have reduced the cash expected to be generated by the company’s loans and therefore the associated valuation has been reduced.
Market backdrop
Higher interest rates have weighed heavily on the infrastructure sector
We have written frequently about the challenges faced by the infrastructure sector in recent years, driven mostly by the rise in interest rates that has greatly increased the relative attractiveness of more traditional income sectors, particularly low-risk corporate and government debt.
As evidenced in the company’s 2024 performance, valuations have fallen due to rising discount rates, while the increase in financing costs has weighed on the sectors’ appeal, especially for those companies relying on leverage to help drive capital deployment programmes. Despite this, we believe the extent and duration of the current sell-off goes well past the mechanical impact of these events, highlighted by valuations which have fallen below levels seen during the worst of the GFC. This is especially true for GCP, which has maintained conservative leverage and continues to generate strong earnings thanks to its focus on diverse, long-term, public-sector-backed investments; inflation linkages; and regulated and contracted cashflows. For comparison, back in 2010, when yields were at a similar level to where they are today, GCP traded on a premium of almost 10% despite having a less diversified portfolio, and greater exposure to construction stage projects. As of publishing, its discount was 32.6%, a change of over 40 percentage points, which is clearly not a fair reflection of the quality of the company’s underlying assets.
The renewable infrastructure sector which now makes up over 60% of GCP’s portfolio.
We believe the entire sector has been tarred by the poor performance of a relatively small number of operators whose business models have proven to be untenable in the current market environment. There also appears to be a broader lack of understanding around these assets and the quality and reliability of the investments that have enabled dividend yields to head towards 10%. Positively, given the wealth of structural growth opportunities which exist across the sector, these depressed valuations do provide a compelling opportunity for companies such as GCP with the scale and flexibility to consolidate and capitalise.
Manager Philip Kent points to the company’s long-term track record of performance across various market cycles as a reason for optimism going forward. A focus on diversification across the infrastructure spectrum has allowed it to adapt to developments in any one sector (such as decreasing yields and more competition) and move into other areas if a sector no longer represents attractive risk-adjusted returns. This has been evidenced in recent years, with the company working through the divestment of its maturing supported living assets while shifting exposure into the renewable infrastructure sector, which now makes up over 60% of GCP’s portfolio. With multiple factors now driving infrastructure investment, including infrastructure deployment to address population change; decarbonisation; and energy security, there exists a wealth of opportunities to shift into higher-yielding and more-attractive sectors of the market.
Improving outlook
In our previous research we highlighted how the adviser believes that there is a significant disconnect between the government’s stated aims for infrastructure investment and what is actually being built. This has only become more compelling following the policy initiatives announced by the new Labour government.
These included a range of measures to speed up infrastructure development including changes to the National Planning Policy Framework and the formation of the National Infrastructure and Service Transformation Authority to better support the delivery of significant capital projects. In addition to housing and energy security, the renewable energy sector was a key area of focus as the government attempts to deliver its ambitious goal of fully decarbonising the electricity system by 2030.
We expect the steady normalisation of interest rates to provide a catalyst.
GCP appears to be increasingly well positioned to capitalise on these developments thanks to its flexible, debt-focused funding approach. The company’s track record of being an early mover appears especially well matched with regard to new subsidy regimes for emerging technologies. These include net zero (green) hydrogen, carbon capture, and the expansion of existing market support measures (such as the CfD scheme), which offer an attractive opportunity for GCP to play a key role in the scaling-up and deployment of new infrastructure.
Interest rates
The steady normalisation of interest rates ought to be providing another catalyst. With inflation falling back to target, the Bank of England (BOE) has now begun to ease monetary policy, announcing two 25-basis-point rate cuts in 2024, dropping the bank rate to 4.75%. These announcements helped drive a solid re-rating for many of the better-performing infrastructure companies, including GCP, over the first half of 2024.
Unfortunately, it has not all been one-way traffic, with concerns around the inflationary impact of the budget and the potential knock-on effects from US policy uncertainty (particularly around tariffs) leading to a repricing in the number of rate cuts expected for 2025 and rising government bond yields. As shown in Figure 3, we are now expecting between two and three cuts over the next 12 months, for an implied rate around 4%. Although this is still a significant shift down from the peak of 5.25%, only a few months ago markets were anticipating up to five rate cuts over this period. As we discuss in the discount section on page 15, this has led to a repricing of some rate-sensitive sectors of the market after a period of optimism earlier in the year.
Despite this, the BoE remains committed to easing monetary policy and as interest rates fall, we expect capital to flow back towards alternative investments, especially given the attractive yields on offer, highlighted by GCP’s current yield of 9.8%.
Figure 3: Implied UK overnight rate & number of cuts
Source: Bloomberg
Cost disclosures
The entire investment trust sector should also benefit from long-overdue cost disclosure reforms. On 22 November 2024, a Statutory Instrument came into law to remove the requirement for investment companies to publish ongoing charges, a figure widely accepted to be an inaccurate representation of the actual cost of investing in the sector.
On 22 November 2024, a Statutory Instrument came into law to remove the requirement for investment companies to publish ongoing charges
Although this is a no doubt a positive development, since the announcement there has continued to be confusion, with some investment platforms still requiring ongoing charges to be disclosed. The reforms have not been helped by a recently published consultation paper by the FCA on its proposed consumer composite investments regulation. Some have interpreted this as an intention to reinstate a single aggregated cost figure for trusts, without acknowledging that costs are already reflected in share prices. Unfortunately, the consultation will not close until March 2025, and implementation of any new rules might not be until the end of the year, suggesting that the row will drag on for a while yet. You can read our ongoing discussions around the cost disclosure issues here.
Capital recycling
In December 2023, GCP announced a plan to release £150m (roughly 15% of the portfolio) to facilitate a rebalance of sector exposures, apply funds towards a material reduction in the RCF, and return at least £50m in capital to shareholders. It was initially hoped that this would be completed by the end of 2024; however, consistent delays throughout the year have meant the target completion date has been shifted to H1 2025. This delay is tempered by the expectation that realisations will now comfortably exceed the initial target.
To date, the company’s disposals total £38.2m, the bulk of which was achieved via the sale of GCP’s interest in loan notes secured against Blackcraig Wind Farm. The disposal occurred at a 6.4% premium to the valuation of the project as at 31 March 2024, generating net cash proceeds of c.£31m while reducing GCP’s exposure to power prices and equity-like investments (which now sit at just 6% of the portfolio). Importantly, the sale also provided further validation of the company’s underlying NAV. A portfolio of rooftop solar assets has also been realised, generating proceeds of £6.8m. Subject to contract, further proceeds of c.£20m are expected from the disposal of a portfolio of onshore wind farms.
To date, the company’s disposal’s total £38.2m
With the proceeds of Blackcraig now available to it, GCP has been buying back shares steadily since 12 December 2024.
Debt reduction
Although the initial stages of this capital programme have taken longer than originally hoped, the company has made material progress in its stated aims of reducing the outstanding RCF, which was identified as a priority given the high-interest-rate environment. In March 2024, the RCF was refinanced from £190m to £150m with the drawn balance of this facility reduced significantly from £104m at 30 September 2023 to £57m. As further disposals are completed, the company expects this balance to be reduced to zero.
Over the 2024 financial year, the company also completed the repurchase of 3.4m shares under its existing buyback facility. The repurchase of shares continues to offer attractive returns, given the current discount to NAV, while helping to address any imbalance in supply and demand that may otherwise create volatility in the rating of the company’s shares. This remains a delicate balance, however, with the adviser remaining conscious that further buybacks may do little to move the discount and would reduce the size of the trust – decreasing liquidity and perhaps deterring some of its target investors.
Portfolio
As of 30 September 2024, there were 50 investments in GCP’s portfolio (including the rooftop solar portfolio discussed above, with the sale occurring after the financial year end). The average annualised portfolio yield over the financial year was 7.8%, and the portfolio had a weighted average life of 11 years.
Figure 4: Split of the portfolio at 30 September 2024
Source: GCP Infrastructure Investments
No new investments were made over the financial year, with the adviser focusing instead on its capital recycling programme.
Figure 5: Sector allocation at 30 September 2024
Figure 6: Security allocation at 30 September 2024
Source: GCP Infrastructure Investments
Source: GCP Infrastructure Investments
As noted, the adviser views renewable energy infrastructure as a key area of focus and going forward. The rebalancing of the portfolio through the capital reallocation policy is targeting a reduction in social housing and equity-like exposures, which now sit at just 6%.
Figure 7: GCP sources of income as at 30 September 2024
Source: GCP Infrastructure Investments. Note 1) does not include the sale of the rooftop solar portfolio which occurred post period end.
Top 10 investments
Figure 8: GCP’s 10 largest investments as at 30 September 2024
