HICL undeterred by competition in UK

The London-listed infrastructure investment firm acknowledges that UK pricing is sometimes unattractive, but sees no reason to change the balance of its portfolio by geography.

Announcing what chairman of the board Graham Picken described as a “strong set of results” for the year to 31 March 2014, London-listed fund manager HICL acknowledged that pricing in the UK – where it does the bulk of its deals – continued to be impacted by strong competition.

“The prices of UK investments have increased to levels which are at times unattractive for the group,” said Tony Roper, director at InfraRed Capital Partners (HICL’s investment adviser), in a statement.

But, while pointing out that the firm has “made progress” with recent deals in France, Ireland and Australia, it does not appear likely that its geographic approach will change much in the near future.

“While geographic diversity has certain benefits, the geographic composition of the portfolio is expected to remain materially the same,” said Roper. “Despite competitive markets we still believe we will be able to make further investments, both in the UK and, selectively, overseas.”

Being selective may be the key. The firm pointed out that while it made 16 new investments and six incremental acquisitions for a combined £230 million during the year, it only made four investments from the 18 auction processes in which it participated.

The firm announced that it had achieved its dividend target for the year of 7.1 pence per share and remained confident of achieving its 7.25 pence per share target for the year to 31 March 2015.

The firm’s net asset value per share (post distribution) was 123.1 pence, an increase of 3.5 pence over the September 2013 figure and an increase of 6.7 pence compared with the March 2013 number.