In this webinar, Phil Kent and Robyn MacHugh, hosted by Cameron Gardner, provide an update following the publication of GCP Infrastructure Investments Limited’s net asset value (NAV) as at 30th September 2026.

Below are the key takeaways from the webinar and you can watch the replay here:

The Company’s unaudited NAV per share increased by 0.79p over the quarter to 99.39p. The key driver was higher electricity price forecasts, reflecting both higher near-term futures prices and higher third-party long-term forecasts, which contributed 0.97p per share net of the Company’s hedging arrangements. Higher actual generation across the renewable energy investments also supported the NAV, as did the purchase of 57 million shares through the share buyback programme, which added 1.19p per share.

The team reiterated that the capital will continue to be used in line with the framework set out at the Capital Markets Day earlier in the year. The framework compares two approaches: returning all capital to shareholders as loans naturally amortise, or reinvesting it at an assumed return of 10%. The two deliver an equivalent return to shareholders at a share price of around 90p. A ‘grey zone’ around that level recognises that factors beyond the maths also matter to shareholders, including the Company’s scale, liquidity in its shares, its relevance as a lender and the distinctive exposure it offers within the listed infrastructure sector. Within the grey zone, the Company can continue buybacks while also considering new investment opportunities. With the shares trading at a discount of around 17% to 18% at the time of the webinar, below the grey zone, capital will continue to be returned through buybacks, while remaining mindful of the Company’s scale.

£180 million of asset disposals have now been completed or exchanged, on average at NAV, which the team believes supports NAV rather than the share price as the more appropriate valuation of the portfolio. The revolving credit facility, which stood at around £104 million when the capital allocation programme was first announced, has been fully repaid and is being renewed with lower commitments. To date, 140 million shares have been bought back with an aggregate value of £105 million, comfortably exceeding the £50 million minimum target, with £70 million returned within the Company’s financial year to end of September.

The team highlighted a forward-looking disposal pipeline of around £130 million, pursued either through the sale of loans to other lenders or by encouraging borrowers to sell the underlying businesses and repay the debt. The supported social housing sale which exchanged earlier this year is due to complete this month, subject to the finalisation of an external rating supporting the buyer’s senior debt. The sale of solar assets and two onshore wind projects in Northern Ireland is in confirmatory due diligence and is expected to complete before the end of 2026. Together, around £50 million of disposals is expected to complete by the end of the year.

Supported social housing loans were typically made at around 6% plus inflation, placing them at the lower-returning end of the portfolio while extending its duration. As the Company exits the sector, the weighted average life of the portfolio is expected to reduce from around 11 years to approximately eight years, and the weighted average annualised yield to increase from 8.1% to around 8.3%. Equity-like exposures have also fallen through disposals and now represent c25% of the portfolio.

The portfolio, valued at £740 million across 44 loans, remains fully operational with no construction or development risk. Renewable energy now makes up just over half of the portfolio, with PFI/PPP (public-private partnership) investments at 32% and supported living at 18%. Just over half of the loans benefit from some form of inflation protection, and the top 20 assets account for around 46% of the portfolio. Even without further disposals, the Company is forecast to receive £180 million of principal receipts over the next four years through the natural amortisation of its loans.

The 7p per share dividend target for the financial year to 30th September 2026 was paid in full, representing a yield of 8.7% on the current share price and marking 16 consecutive years of dividend payments. The dividend is well covered on a total cash flow basis, although as a debt fund the Company reports dividend cover on an interest accruals basis, excluding principal receipts. Since IPO in 2010, the Company has paid 117p per share in cumulative dividends, with NAV per share broadly in line with its level at IPO.

Baseload power futures rose by around 30% between June and September, and by a further 25% or so since the end of September. The Company’s hedging arrangements produced a mark-to-market movement of around £3 million, mitigating some of this volatility in the NAV. The team noted that the Company uses Afry’s long-term power price forecast, which it considers a conservative starting point relative to other market forecasters, and that sensitivity analysis will be published in the annual report. Completion of the two Northern Ireland onshore wind disposals is expected to materially reduce the Company’s short-term exposure to power prices.

The team viewed the most significant item in the 28th October 2026 Budget as the consultation published alongside it on wholesale contracts for difference (WCfDs). Wind and solar assets under the Renewables Obligation typically earn 50% to 60% of their revenue from Renewables Obligation Certificates, an inflation-linked government subsidy, with the remainder from volatile wholesale power prices. The proposed WCfDs would swap that wholesale element for a fixed price over a period of five or ten years. Whether this proves attractive will depend on where prices clear relative to the power price assumptions used in valuations, which makes the benefit difficult to predict at this stage.

The consultation proposes to exclude fuelled assets such as biomass, anaerobic digestion and energy-from-waste, largely on the grounds of their smaller scale and complexity. The team intends to push back firmly on this in its response, given these assets’ continuing role in reducing emissions and their importance to supply chains for food waste, farm waste and waste wood, all of which are represented in the Company’s portfolio.

The National Wealth Fund received additional capital to invest in low-carbon generation, although how this will interact with Great British Energy remains to be seen. The Budget also pointed to public-private partnership (PPP) models as a way to bring private capital into higher defence spending, and recommitted to introducing an onshore competitive transmission regime, which the team sees as necessary given the UK’s need for new grid capacity. Elsewhere, funding at the Department for Energy Security and Net Zero was reprioritised away from hydrogen, carbon capture and storage, and the Warm Homes programme. The reduction in the main rate of capital allowances to 12% from April 2027 will bring forward some tax cash flows for taxpaying assets; the team will reflect this in its models but does not expect a material impact on valuations.

The team will be looking closely at the government’s 10-year infrastructure strategy and an updated infrastructure pipeline from the National Infrastructure and Service Transformation Authority (NISTA), both expected by the end of the year, for their implications for infrastructure investment.

The team encouraged shareholders to use the online investor portal, Carapace, which now includes real-time performance updates alongside detailed information on individual investments and their underlying assets. The annual results will be published in December, including independently validated impact data, and will be followed by a results webinar.

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.