The strategy of the Fund is to provide investors with an innovative way to access the physical real assets underpinning the AI revolution and the wider digitalisation of economies, changing the way we work, live and play.

Investing in a portfolio of best-in-class, next-generation infrastructure owners and developers listed in developed markets, the Fund offers diversified exposure across geographies, digital infrastructure sectors and asset classes, including both equities and corporate bonds.

The Fund seeks to generate attractive total returns through a combination of income, growth in income and the potential for additional capital appreciation from its underlying investments.

The Fund is currently comprised of 31 investments (25 equity investments and 6 debt investments) across a range of specialist digital infrastructure sub-sectors. Current exposure is diversified across logistics properties, including warehouses and e-commerce fulfilment centres (42.3% of the portfolio), communication towers (27.4%) and data centres (21.7%). The Fund may also invest in network infrastructure, although it had no exposure to this sub-sector at the period end. Overall, equity investments represented 75.9% of the portfolio and debt investments 15.5%.

Over the course of the month, the NAV of the Fund decreased by 3.0% (C Acc GBP), compared to the global real estate index*, which decreased by 4.1%. Since launch, the NAV has increased by 7.1% (C Acc GBP), compared to a rise of 14.4% for the index*. All sub-sectors performed negatively during the month, with logistics, communication towers and data centres down 3.5%, 4.1% and 5.9% respectively. It was pleasing to see the relative outperformance of the credit sleeve, which fell by just 1.0%.

Markets were mixed in September, as rising bond yields, higher oil prices, and a stronger U.S. dollar weighed on most major markets. Oil rose sharply as the U.S. and Iran traded military strikes for the first time since July, with Brent moving back above $100 a barrel. Bond markets came under significant pressure, with a sustained sell-off pushing U.S. Treasury yields to multidecade highs, while the Federal Reserve raised interest rates by 25 basis points, its first hike since 2023. Gains were concentrated in just two sectors, technology and communication services, while rate-sensitive sectors such as utilities, real estate and industrials lagged. Beneath the headline index, about three-quarters of S&P 500 stocks fell over the month. Internationally, global equities broadly declined, led lower by Europe, China, and Australia, although gains in Taiwan and South Korea provided some support in Asia.

Within the equity sleeve, Helios Towers (portfolio weight 4.0%) was the top performing holding in September. The share price responded positively to an increase in the company’s share buyback programme from $75m to $175m.

On the other hand, NEXTDC’s (portfolio weight 2.1%) share price fell during the month. The company raised A$1.1bn via a convertible bond to help fund its significant development pipeline, prompting questions about the scale of NEXTDC’s capital requirements over the coming years as that pipeline progresses, especially in a macroeconomic environment characterised by rising interest rates. We continue to believe in the company’s growth trajectory and will be watching for further conversion of the 740MW of contracted utilisation into billed utilisation, which today stands at just 175MW.

Keppel DC REIT (portfolio weight 3.0%) announced the acquisition of two data centres in Japan for S$1.6bn. The facilities are currently let to four hyperscaler customers on long-term leases with contracted escalators of almost 3%. In-place rents are about 30% below market rents, offering “a balance between reversion opportunities and long-term income visibility” according to the company. Keppel DC REIT raised fresh equity and debt capital to fund the acquisition, and the fund participated in the equity raise. On a similar note, Warehouses De Pauw (portfolio weight 2.2%) raised approximately €400m to fund a range of investments, targeting yields in excess of 7%. The raise was oversubscribed and in the end was completed at a 9% discount to NAV.

On the back of last month’s M&A activity, SEGRO (portfolio weight 5.1%) shareholders voted in favour of the best and final cash and stock offer from Prologis. The deal is due to complete in the first half of 2027.

Overall, the Fund Manager maintains a positive outlook on the digital infrastructure sector, primarily due to the strong performance of underlying portfolio assets. As such, the digital infrastructure sector remains a key investment area for any investors seeking long-term returns.

^*MSCI World IMI Core Real Estate IMI GBP