3i Infrastructure eschews India for developed markets

Investment company 3i Infrastructure has decided to rebalance its investment strategy in favour of less volatile investments in more developed markets.

Investment company 3i Infrastructure has decided to rebalance its investment strategy in favour of less volatile investments in more developed markets.

After lifting the total return 59% to £89.1m in the year to end-March, the FTSE 250 closed-ended vehicle said it was lowering its return objective to an annual measure of 10% total return per year from a previous longer-term objective of 12%.

Chairman of the board Peter Sedgwick said: "Our investments in the European portfolio continued to perform in line with, or above, our expectations. The performance of the India Fund, however, continued to be affected by challenging conditions."

As such, the board resolved the manager would make no more new investments in the subcontinent to rebalance the portfolio away from India in favour of core infrastructure and public-private partnerships (PPP) in developed markets.

Cressida Hogg, Infrastructure Managing Partner at the investment manager 3i Investments, added that the company was assessing a number of opportunities in the target areas of core and social infrastructure to develop the fund's investment pipeline.

Having increased the dividend per share to 6.49p from 5.94p in 2012, Sedgwick added that after assessing the company's investment strategy, the board had lifted its dividend objective from 5% to 5.5% of opening net asset value (NAV).

Net asset value at the period end stood at 125.2p, up from 121p a year before.

Cash balances stood at £179m at year end, but £31m of which will be used for the payment of the proposed final dividend, £3m for further investment in the Dalmore private finance initiative (PFI) fund, £60m for an investment in the UK Department for Transport's Thameslink improvements and £25m set aside for any residual cash calls by the 3i India Infrastructure Fund.

As such, since the year end the company replaced its previous banking arrangements with a new £200m, three-year revolving credit facility with a syndicate of five major banks, which it intends to use as a bridge to equity, to be refinanced through equity issuance in due course.

Shares in 3i Infrastructure were down 0.05p at 131.15p at 10:53 on Thursday.

OH

Recommended

HubSpot: a tech stock set to tumble
Trading

HubSpot: a tech stock set to tumble

US tech stocks have had a fantastic couple of years. But this year is unlikely to be so bullish for high-fliers that can’t turn big profits.
18 Jan 2022
How to be better at selling stocks
Investment strategy

How to be better at selling stocks

There is plenty of advice around about buying stocks, but not so much about when you should sell. John Stepek explains the two key things to know abou…
14 Jan 2022
Share tips of the week – 14 January
Share tips

Share tips of the week – 14 January

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
14 Jan 2022
Fintech: how to profit as technology transforms banking around the world
Share tips

Fintech: how to profit as technology transforms banking around the world

Financial technology – from apps to APIs to the cloud – is rapidly transforming financial services. This will spell doom for some incumbent firms, whi…
14 Jan 2022

Most Popular

Five unexpected events that could shock the markets in 2022
Stockmarkets

Five unexpected events that could shock the markets in 2022

Forget Covid-19 – it’s the unexpected twists that will rattle markets in 2022, says Matthew Lynn. Here are five possibilities
31 Dec 2021
US inflation is at its highest since 1982. Why aren’t markets panicking?
Inflation

US inflation is at its highest since 1982. Why aren’t markets panicking?

US inflation is at 7% – the last time it was this high interest rates were at 14%. But instead of panicking, markets just shrugged. John Stepek explai…
13 Jan 2022
Tech stocks teeter as US Treasury bond yields rise
Tech stocks

Tech stocks teeter as US Treasury bond yields rise

The realisation that central banks are about to tighten their monetary policies caused a sell-off in the tech-heavy Nasdaq stock index and the biggest…
14 Jan 2022