GCP Infrastructure Fund – Compelling yield

6 minute read

Philip Kent

Director

Falling power price forecasts (the product of a range of factors, including lower gas prices and reduced demand, as we explain on page 10) have weighed on GCP’s NAV in recent quarters. However, the good news on vaccines should provide some relief.

We explained the rationale for GCP’s rebased 7p annual dividend in our last note, which can be accessed by clicking the link on page 29.

We would note that, even after the dividend cut, GCP trades on the highest yield in its sector (by some distance) and the investment adviser has a pipeline of opportunities lined up that it thinks will allow GCP to maintain and possibly grow the dividend in the future.

Public-sector-backed, long-term cashflows from loans used to fund UK infrastructure

GCP aims to provide shareholders with regular, sustained, long-term distributions and to preserve capital over the long term by generating exposure primarily to UK infrastructure debt and related and/or similar assets which provide regular and predictable long-term cashflows.

GCP primarily targets investments in infrastructure projects with long-term, public-sector-backed, availability-based revenues. Where possible, investments are structured to benefit from partial inflation-protection.

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