Fundraising

Prices edge up, but HICL deals flowing

The London-listed secondary deal specialist is putting capital to work at a strong pace but says competition is pushing prices up in some markets.

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Following the announcement of HICL’s annual results last week, Tony Roper told Infrastructure Investor the firm had seen a “slight increase in prices” over the last 12 months as interest grew in social infrastructure assets – including from pension funds looking to make direct investments. 
 
Roper, who is responsible for the day-to-day management and development of the HICL portfolio, said that in markets such as France, Belgium, the Netherlands and Germany, HICL had been exploring deals but sometimes found that “local investors were prepared to pay more”. 
 
He said there was considerable demand for funds such as London-listed HICL, and that the challenge was to keep investing the money. During the year to the end of March 2013, the firm raised a total of £272.6 million (€318.5 million; $411.8 million) through a £167.3 million issue of new ordinary shares and an aggregate of £105.3 million from tap issues. 
 
During the period in question, there was no sign of an inability for new investments to keep pace with fundraising. Indeed, HICL put a total of £278 million to work through 21 acquisitions – and has since gone on to complete four more deals worth a total of £36.1 million since the end of the reporting period. Roper said the forward pipeline was good, especially in the UK market for secondary social and transport deals. 
 
Roper highlighted that HICL had met its target of delivering a total distribution of 7.0p per share for the year – and has raised this slightly to 7.1p for the year to March 2014. Net Asset Value (NAV) per ordinary share (post distribution) stood at 116.4p at the end of the reporting period, compared with 112.8p at 31 March 2012 – a 3.2 percent increase. 
 
HICL was the first infrastructure investment firm to list on the London Stock Exchange in March 2006. The firm has more than 80 social infrastructure investments worth in excess of £1.1 billion. Its assets are predominantly operational and underpinned by long-term contractual agreements delivering yield.