Will PFI's End Derail Infrastructure Funds?

While question marks linger over the sector after recent setbacks, infrastructure has fundamental qualities which continue to make it an attractive investment

Holly Black 20 November, 2018 | 9:44AM

Infrastructure motorways

Infrastructure funds have surged in popularity among income-seeking investors in recent years. These vehicles offer a steady, reliable and often inflation-linked income stream at a time when interest rates have remained stubbornly low and such attributes have been particularly hard to find.

But a series of blows to the sector this year has seen many of these investments fall from double-digit premiums to wide discounts as investors have questioned the prospects for the future. The collapse of high-profile outsourcing firm Carillion brought a black cloud over the sector at the start of the year and, more recently, the announcement in the November Budget that the Government will put an end to private finance initiatives (PFI) contracts has left some questioning whether infrastructure funds can continue to deliver.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
GCP Infrastructure Investment Ord117.04 GBP1.77
HICL Infrastructure Company Ord175.81 GBP0.58
Premier Global Infrastructure Ord111.50 GBP0.00
Sequoia Economic Infrastructure Inc Ord104.20 GBP-0.19
VT Gravis UK Infras Inc I GBP Acc134.57 GBP0.12

About Author

Holly Black  is Senior Editor, Morningstar.co.uk

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