In this webinar, Phil Kent, Robyn MacHugh and Cameron Gardner provide an update on GCP Infrastructure Investments Limited, following the announcement of the Company’s NAV as at 31 March 2026.
You can watch the webinar replay here:
GCP Q1 2026 NAV update webinar replay
Capital allocation strategy remains the central focus
GCP continues to prioritise its capital allocation strategy, first outlined in 2023, The strategy centres on recycling capital through disposals and refinancings, reducing net debt, and returning capital to shareholders.
- Net debt has reduced significantly, from £104m to £17m.
- £43.3m has been returned to shareholders via share buybacks to date.
- c.£128m of disposals have been announced and completed broadly in line with NAV, reinforcing confidence in asset valuations.
Looking ahead, the company maintains a £200m pipeline of potential future disposals, with near-term completions expected to generate around £90m including supported social housing and solar refinance.
Clear framework guiding future capital deployment
Earlier this year GCP undertook period of consultation with shareholders to inform ‘what’s next’ following completion of the current capital allocation strategy, Informed by this feedback, GCP introduced a structured framework to determine how capital is deployed, based on share price relative to NAV, at the recent Capital Markets Day.
- Discount in excess of c.15% discount to NAV: priority remains returning capital.
- “Grey zone” (around ~90p/share): a balanced approach between return of capital and selective reinvestment.
- Above this level: reinvestment becomes more compelling relative to buybacks.
While the mathematical framework is important, the Board acknowledges shareholders’ broader considerations such as company scale, liquidity and income stability. The Company will continue to focus on the recycling of assets in target sectors whilst maintaining a NAV of > £750m and sustaining the current dividend of 7 pps in the medium term.
Portfolio repositioning underway
The portfolio is being actively reshaped to reduce exposure to supported social housing, equity-like investments and merchant electricity price .
Post-disposals, the portfolio is expected to have shorter duration (c.11 years → c.8 years), a slightly higher yield (c.8.0% → c.8.3%), and reduced exposure to lower-yielding, long-duration assets.
Diversified, fully operational portfolio
As at 31 March 2026:
- Portfolio value: £851m
- Investments: 47
- Weighted average life: 11 years
- Weighted average yield: 8%
Sector allocation:
- 57% renewables
- 28% PFI/PPP
- 15% supported living
- 0% construction exposure
The portfolio remains highly diversified, with the top 20 assets accounting for just 44% of value, and all assets fully operational. Around half of the portfolio benefits from inflation-linked revenues.
Strong cash generation supports dividend
The portfolio continues to generate robust cash flows:
- £280m of principal repayments expected over the next four years (before disposals)
- Dividend remains well covered on a total cash flow basis
GCP maintains its target dividend of 7p per share for the current financial year.
NAV stable
NAV per share was broadly flat over the quarter, decreasing marginally by 0.01p.
Key drivers included:
- +0.57p from updated electricity price forecasts (net of hedging)
- –0.23p from updated OBR macroeconomic assumptions
- +0.26p from share buybacks
Market developments: limited impact on GCP
Recent volatility in energy markets, which has been driven by geopolitical tensions, has affected short-term power prices, though hedging has mitigated impacts on the portfolio.
Key regulatory announcements made recently are not expected to materially affect the Company:
- Carbon price support removal (from 2028): already reflected in existing power price forecasts used by the Company
- Electricity market reforms (EGL increase and potential wholesale CfDs):
- EGL changes unlikely to impact cash flows given forecast price levels
- Wholesale CfDs may reduce revenue volatility but require further detail to assess fully
GCP maintains a conservative approach to long-term power price assumptions, with forecasts materially below some peers.
Disposal activity progressing despite market noise
Recent policy announcements have not disrupted ongoing disposal processes. Investor appetite remains, particularly for assets with potential for repowering or life extension.
Optionality introduced through potential CfD mechanisms may enhance asset attractiveness, though clarity is still needed.
Continued focus on transparency
GCP continues to enhance investor transparency through its Carapace portal, providing detailed portfolio-level data. Feedback has been positive, with further enhancements planned.
Overall: steady progress and disciplined execution
The quarter reflects continued delivery against GCP’s strategy:
- Disposal processes progressing as planned
- Continued return of capital through buybacks Portfolio repositioning underway
- NAV stable and dividend maintained
- Market developments largely neutral in impact
The company remains focused on disciplined capital allocation, maintaining scale, and delivering stable income while navigating evolving infrastructure and energy markets.
Important Information
This article has been prepared by Gravis Capital Management Limited (the "Investment Adviser“ or “Gravis”) and is for information purposes only. It is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Any recipients of this article outside the UK should inform themselves of and observe any applicable legal or regulatory requirements in their jurisdiction and are treated as having represented that they are able to receive this article without contravention of any law or regulation in the jurisdiction in which they reside or conduct business.
This article should not be considered as a recommendation, invitation or inducement that any investor should subscribe for, dispose of or purchase any such securities or enter into any other transaction in the GCP Infrastructure Investments Ltd (the “Company”) or any other fund affiliated with Gravis. The merits and suitability of any investment action in relation to securities should be considered carefully and involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of such securities.
No undertaking, representation, warranty or other assurance, express or implied, is made or given by or on behalf of the Company, the Investment Adviser or any of their respective directors, officers, partners, employees, agents or advisers or any other person as to the accuracy or completeness of the information or opinions contained in this article and no responsibility or liability is accepted by any of them for any such information or opinions or for any errors, omissions, misstatements, negligence or otherwise for any other communication written or otherwise. In addition, neither the Company or the Investment Adviser undertake any obligation to update or to correct any inaccuracies which may become apparent. The information in this article is subject to updating, completion, revision, further verification and amendment without notice.
Past performance is no guarantee of future performance.
Gravis Capital Management Ltd is authorised and regulated by the Financial Conduct Authority; registered in England and Wales No: 10471852 and its principal place of business is 24 Savile Row, London W1S 2ES.
