JLIF posts modest NAV increase

The half-year results come a few months after the London-listed fund widened its investment criteria amid strong competition for assets.

John Laing Infrastructure Fund (JLIF) today announced interim results that painted a good yet relatively soft first half of the year for the firm.

The London-listed fund’s portfolio of 52 assets was valued at £805.2 million (€1.01 billion; $1.34 billion) as at 30 June 2014, a 1.2 percent increase from 31 December 2013.

Adjusting for the impact of the timing of acquisitions made and distributions received during the period, the expected portfolio value growth in the first half of the year was about £30.6 million (3.99 percent). The actual underlying growth in value was £38.0 million (4.95 percent).

This was mostly accounted for by value enhancements across the portfolio, including a reduction in costs and a reduction in UK and Finnish corporation tax rates.

The fund’s net asset value (NAV) barely moved, however. JLIF reported a NAV of 107.0p as at 30 June, an increase of 0.2 percent since the end of last year (or 0.8 percent excluding unrealised exchange rate movements).

“The portfolio valuation did benefit from some asset management, although this had only a modest impact. The share price of 119p represents an 11.2 percent premium to the latest NAV of 107p which looks high in the absence of any significant value enhancement events,” commented UK broker Numis Securities in a statement.

The company paid a dividend of 3.25p per share in May relating to the six-month period to 31 December 2013, up 4.0 percent from the previous level of 3.125p. This represented a yield of 5.4 percent per annum.

Total shareholder return equated to 38 percent since inception, equivalent to more than 10 percent per annum, Andrew Charlesworth, investment adviser of JLIF, told Infrastructure Investor. It stood at 3.99 percent for the first half of the year.

JLIF made three follow-on investments in the period, increasing its stake in two street lighting investments and a social housing project.

In February, the fund also widened its investment criteria to include rail assets under the right of first refusal agreement with UK developer John Laing, up to 10 percent of the portfolio in non-PPP assets, and an increase in the amount of in-construction assets held from 15 percent to 30 percent.

Charlesworth said that JLIF had been invited to bid for stakes in 59 assets over the period. “We decided not to bid for a number of those, because we thought that either they didn’t really suit us or pricing was getting a bit silly on some of them,” Charlesworth said.

The fund typically finances acquisitions by drawing on its £150 million debt facility – subsequently repaid via small capital raisings – although large portfolio acquisitions would sometimes warrant a prior fundraise.