The Fund made a positive start to 2026 and recorded a gain of 2.86% in January (C Accumulation GBP). Strength was relatively broad-based with a majority of positions delivering positive performance during the period.

Among the strongest performers were the specialist REITs within the portfolio: Primary Health Properties (+7.67% in January), Tritax BigBox (+8.61%) and Target Healthcare (+6.35%). Primary Health Properties provided a positive FY update with robust like-for-like rental growth and a 2.8% increase in its 2026 dividend target. The owner of GP surgeries and private hospitals was the largest exposure within the Fund at the end of January having performed very well since its merger with Assura Group last October (and has made solid headway in achieving expected synergies). The combined platform of 1,142 assets, valued at ~£6bn, provides an attractive way to gain exposure to this critical component within the UK’s health infrastructure and offers long-term visibility via a WAULT of 11 years. Tritax, meanwhile, provided a similarly positive FY trading update and has made good progress with disposals of non-core assets resulting from recent acquisitions. CEO Colin Godfrey stated, “with strong occupational interest across both logistics and data centres, the successful integration of recent acquisitions, and clear structural tailwinds supporting our portfolio, we enter 2026 well positioned to deliver on our ambition to grow adjusted earnings by 50% by the end of 2030”.

The Fund’s exposure to traditional equities operating within utility, communications & data, and power transmission segments continued to benefit from strong positive momentum. SSE was the best individual performer (+11.15% in January) with Vodafone and National Grid each returning in excess of 8% during the period. Although there was no obvious stock-specific news to drive the uplift, the greatest individual contribution to performance came from Foresight Environmental Assets, which gained 10.33% over the month and has a relatively high weighting within the portfolio.

While SDCL Efficiency continued to struggle following a poor update in December, there were no notable detractors.

The government announced its decision to adopt “proposal 1” in relation to its recent consultation regarding the basis of indexation for Renewable Obligation subsidies. This will see RO prices indexed to CPI from 2026, which essentially brings forward a shift that would have occurred from 2030. While the shift will prove a detractor to future cash flow expectations, it was the least punitive option (bar no change) and companies affected had already published a range of anticipated sensitivities to the proposals put forward. Insomuch as the market had discounted a worst-case scenario, which was avoided, and now has clarity looking forward, there is potential for some relief rally among this cohort.

Traditional equity exposure was reduced further through partial sales of positions in National Grid, Pennon Group, SSE, United Utilities, Vodafone. This cohort has continued to perform well, contributing significantly to recent performance and exposures had increased within the portfolio. The Manager is keen to lock in gains and maintain prudent levels of equity risk within the Fund. At the end of January, traditional equities accounted for 14.3% of the Fund, which is broadly in line with historic norms for the strategy. Other notable transactions included a reduction in Sequoia Economic Infrastructure.