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GCP Infrastructure Investment Trust

September 6, 2023
Harvest News
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Franklin Global Multi-Asset Income Fund

This month’s fund in focus is GCP Infrastructure. GCP is an investment trust that invests in UK infrastructure that benefits from public-sector backed cash flows, with a focus on providing loans rather than on equity investing. The company’s investment objective is to provide shareholders with regular, sustained, long-term dividends and to preserve the capital value of its investment assets over the long term.

The company is diversified across a range of different infrastructure sectors and has a strong focus on the preservation of capital. The fund has a mature, diverse and operational portfolio of UK infrastructure projects that are well positioned to benefit from the macro trends of population dynamics, decarbonisation and energy security.

The trust just recently announced plans for a full merger with GCP Asset Backed Income, a smaller trust from the same stable. This merger is expected to be positive for both earnings and dividends in the future.

Over the past 12 months, the share price of this trust has fallen by more than 20% while over the same period the value of assets held by the trust has actually risen. The share is now trading at a discount of more than 30% to its assets and offers a very attractive value opportunity.

Points to Note:

  • The company pays attractive risk adjusted income. The current dividend yield is 9.3%
  • The company’s share price has moved to a significant discount to the net value. Current fund discount is -33.76%
  • The Company’s portfolio is 66% invested in the renewables sector, to a total value of £745 million.
  • The current high interest rate environment may allow the company to be more competitive versus traditional lenders, resetting the risk within the portfolio or targeting greater return.

As always, you should only consider the investment views contained in this GCP Infrastructure Investment Trust Fund update in the context of your own attitude to risk and how such choices might impact your Asset Allocation model. Should you wish to discuss your investment portfolio, please contact Harvest Financial Services on 01 2375500 or email justask@harvestfinancial.ie.

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This marketing information has been provided for discussion purposes only. It is not advice and does not take into account the investment needs and objectives, financial position, risk attitude, liquidity needs, capital security needs and/or capacity for loss of any particular person. It should not be relied upon to make investment decisions.
Warning: The return may increase or decrease as a result of currency fluctuations.
Warning: The figures refer to the past. Past performance is not a reliable indicator of future results.
Warning: The value of your investment may go down as well as up. You may get back less than
you invest.
Warning: The income you get from this investment may go down as well as up.