The Fund recorded a total return of 0.17% in December and a total return of 8.66% for calendar 2025 overall (C Accumulation GBP). Encouragingly, positive performance momentum has continued in the first weeks of 2026.

The numbers of positive and negative contributors were broadly evenly split in December. Companies exposed to government-backed social infrastructure concessions performed well, including HICL Infrastructure, International Public Partnerships and GCP Infrastructure Investments. The Fund’s four REIT exposures, which are individually diverse and serve a range of specific tenants such as GP surgeries, logistics/warehousing and care home operators, all performed positively. While shorter-dated reference yields moderated in December, the mid and longer end of the curve, to which the listed infrastructure sector is more sensitive, did not provide such a tailwind. Alongside limited stock-specific news, a clear driver for performance in these sub-sectors is not evident and may simply reflect an element of asset class rotation into year-end or appreciation of relative value following another strong year for equity risk. The best share price performance came from two communications and data infrastructure companies: Cordiant Digital Infrastructure and Vodafone.

Renewable energy generators continued to drag on performance with the government’s ongoing consultation into the basis of subsidy indexation weighing on the sector more broadly. In a bizarre situation, the indexation consultation (which looks at older subsidy frameworks and could ultimately result in adjustments being made to the original terms, as outlined in November’s commentary) runs in the background while the results of the latest round to secure new renewable energy capacity (via Allocation Round 7) are expected to be announced in mid-January. The Fund Manager recognises the concern this willingness to “move the goalposts” from the government may cause AR7 participants, with this appearing to be counterproductive to Labour’s ambitions to incentivise private sector investment in long-term infrastructure projects more broadly. The share price of The Renewables Infrastructure Group retraced as the proposed merger with HICL Infrastructure was abandoned.

The weakest individual performer during the month was SDCL Efficiency Income (with a total return of -12.1%), where an accounting reclassification resulted in aggregate gearing rising above the Company’s investment policy limit. While the news was not well-received by the market and will constrain capex until rectified, operational performance remains stable and cash dividend cover was 1.2x at the half-year stage. CEO Jonathan Maxwell stated that disposals are progressing with “a further disposal expected around year-end”. A swift and successful disposal that would help the business de-lever would certainly be welcomed by investors.

Traditional equity exposure was reduced through partial sales of positions in National Grid, Pennon Group, United Utilities, and Vodafone. The Fund’s cohort of traditional equities, which span sectors including water utilities, communications and energy networks, proved to be among the best individual performers during 2025, with National Grid and Vodafone being the top two overall contributors despite relatively modest weightings within the portfolio. The reduction in equity risk, which continued into the early stages of 2026, locks in some of this upside with UK equity markets at or around all-time highs. 3i Infrastructure, which has performed very well recently on expectations the company is soon to sell its largest portfolio asset at an accretive valuation, was also reduced into share price strength. The Fund closed the year with a prudent cash balance equating to approximately 3.5% of NAV.

Fourth quarter distribution announced

Provisional income distributions (subject to adjustment) for the fourth quarter of 2025, payable in January 2026, amounted to 1.5149p per C Income GBP unit and 1.5322p per I Income GBP unit. On this basis, fourth quarter income distributions reflect a 13.5% increase when compared with the comparable period in 2024, while the total declared distributions for 2025 of 5.6525p per C Income GBP unit and 5.7341p per I Income GBP unit were more than 4% higher than total distributions declared in 2024. As at 31^st December, the Fund’s trailing 12-month yield was 6.39% and 6.49% for the C Income GBP and I Income GBP units, respectively.