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Sequoia Economic Infrastructure Close To Being Fully Invested

LONDON (Alliance News) - Sequoia Economic Infrastructure Income Fund Ltd on Thursday said it ...

Alliance News 7 December, 2017 | 4:30PM
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LONDON (Alliance News) - Sequoia Economic Infrastructure Income Fund Ltd on Thursday said it its close to being fully invested following its capital raise in the first half of its current financial year, and said it is well positioned to benefit from a rising interest rate environment.

Sequoia Economic Infrastructure said at the end of its first half on September 30 its net assets were GBP757.0 million, up from GBP611.8 million at the end of March. The groups net asset value per share fell slightly to 101.24 pence from 102.72p in March.

Sequoia noted that it made a loss of 1.11p from foreign exchange movements, which was a direct result of the gradual strengthening of sterling over the last six months. At September 30, Sequoia said, approximately 90% of the its net asset value consisted of either sterling assets or were hedged into sterling through foreign exchange forward contracts.

"The board is pleased with the progress of the company in the first half. We are close to being fully invested, having deployed most of the funds from our successful GBP160 million capital raise in May and we have a strong pipeline of further opportunities," Chairman Robert Jennings said.

In May Sequoia raised GBP157.4 million in an oversubscribed placing from the issue of 151.7 million shares at 105.5 pence each.

Looking ahead, Sequoia said it has developed a very strong pipeline of mostly private debt infrastructure lending opportunities, which are expected to become executable mostly over the next three to nine months.

"The balance of floating rate and shorter term fixed investments means that the portfolio is well positioned to benefit from a rising interest rate environment. We remain confident in the investment adviser's ability to grow the portfolio and source high quality, cash generative economic infrastructure debt investment opportunities that will enable us to maintain portfolio yield at 8% or higher and an annual dividend of 6p per share," Jennings said.

Sequoia said it is especially excited about potential investments in the transport, accommodation and Telecommunications, Media and Technology sectors where the current portfolio is arguably underweight, and where lending opportunities are often attractive and additional investments would be desirable.

Shares in Sequoia Economic Infrastructure were down 0.4% at 107.74 pence on Thursday.

By Gem Sofianos;

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Sequoia Economic Infrastructure Inc Ord 105.50 GBX -0.47 -
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