JLIF sees currency movements hit NAV

The London-listed fund saw six-month underlying portfolio growth of almost 4%, but the impact of exchange rates resulted in a net asset value decline.

John Laing Infrastructure Fund (JLIF), the London Stock Exchange-listed fund, saw currency movements lead to a 1.4 percent decline in net asset value (NAV) per share from 109.3p to 107.8p in the six months to the end of June.

In a results announcement at the end of last week, the overall decline in NAV from £887.3 million (€1.21 billion; $1.36 billion) to £875.8 million was attributed primarily to unrealised negative exchange rate movements in the Canadian dollar and euro, which affected the value of non-sterling investments. A lower than assumed level of inflation was also cited as a factor.

The firm said that, without the exchange rate movements and impact of inflation, NAV would have shown a 0.6 percent increase.

Speaking to Infrastructure Investor, JLIF investment adviser Andrew Charlesworth said underlying portfolio growth of 3.92 percent (to £872 million) was “ahead of expectations”, which had been around 3.8 percent. The fund made new acquisitions totalling £14.4 million during the period.

Total shareholder return for the six months was 3.1 percent, and a dividend of 3.375 pence per share was declared, to be paid in October.

Charlesworth said the merits of listed infrastructure as a “portfolio protector” had been underlined by a recent beta test the firm had run, which showed “very low correlation” to equities over the last few months during a volatile period for equities generally.

He said the firm – which makes the vast majority of its investments in PPPs and PFI – has made a move into the OFTO (Offshore Transmission Owner) and student accommodation markets as well as looking more at international markets. Countries of interest include Canada, Australia, Central Europe, Spain, France, the Netherlands and Portugal.

Charlesworth hailed the “fantastically better rate” of the new five-year, £180 million revolving credit facility which JLIF signed a week ago with Royal Bank of Scotland, HSBC Bank, ING Bank and Commonwealth Bank of Australia. The facility has a margin of 1.75 percent over LIBOR, compared with the previous facility’s range of 2.3 percent to 2.75 percent.

He added that JLIF was still interested in buying a portfolio of assets if one became available at the right price. The fund’s £1 billion bid to buy UK developer Balfour Beatty’s PPP portfolio was rejected towards the end of last year.