3i Infrastructure posts NAV increase

The London-listed firm has benefitted from an uplift in the value of its European assets amid stabilisation of its Indian portfolio.

3i Infrastructure, the London-listed fund manager, today unveiled annual results that showed a positive year for the firm.

The company reported a net asset value (NAV) of 126.4p as at 31 March 2014, a 3.3 percent increase from the 122.3p it posted at the end of September.

This was mainly driven by the performance of its European assets, including a 14.7 percent uplift in the value of Finnish power grid operator Elenia following the €1 billion refinancing of the company last January.

The increase was somewhat offset by the weak results posted by 3i Infrastructure’s Indian portfolio in the first half of the year, which was negatively impacted by adverse currency movements and a slowdown in Indian economic growth. Performance of the Indian fund stabilised in the second half of the year.

This helped support a total return of £71 million (€86.8 million; $119.6 million) – representing 6.6 percent of opening net asset value – during the period. The firm’s European portfolio return reached £117.4 million, which, were it not for the performance of the Indian portfolio, would have enabled 3i to achieve its 10 percent annual total return target.

The firm’s investments generated portfolio revenue of £82.3 million (up from 2013’s £72.8 million). This fully covered the period’s proposed total dividend of £59.0 million and total costs of £21.9 million.

“We made good progress in the implementation of our strategy, which is to deliver our return objectives by maintaining and building a portfolio primarily focused on the core infrastructure market, while also increasing in a measured way our exposure to primary public-private partnerships (PPP) and renewable energy projects,” said Peter Sedgwick, chairman of 3i Infrastructure, in a statement.

3i invested £84 million this year, including £62 million in Cross London Trains and £19 million in two new primary PPP projects. Its portfolio now comprises 17 investments valued at £996 million at 31 March 2014. These include five core infrastructure assets, five PPP investments as well as the seven assets of the Indian vehicle.

This positive picture will provide a fillip to Phil White and Ben Loomes, who succeeded Cressida Hogg at the helm of 3i Infrastructure at the end of March. While Hogg had been credited for the good overall results displayed by the unit throughout 2013, the year also saw it suspend new fundraising in India and refrain from making new investments in the country.

White is now in charge of portfolio management, while Loome oversees the unit’s strategic development.