While global capital markets remained volatile owing to geopolitical tensions in the Middle East, the strategy recorded a 4.69% gain in April (C Accumulation GBP), recovering most of the performance lost in March.

Broad-based strength was evident across the portfolio. The greatest positive contributors included The Renewables Infrastructure Group, Cordiant Digital Infrastructure, and 3i Infrastructure. Cordiant was the Fund’s best individual performer (+15.27% total return in April) with the primary catalyst being the Company’s imminent admission to trading on the main segment of the London Stock Exchange. 3i Infrastructure’s share price has effectively recovered from the disappointing write-down of a German fibre asset, which overshadowed the highly profitable exit from airport ground support equipment provider TCR.

Two asset-backed lenders, GCP Asset Backed Income and RM Infrastructure Income, were the only detractors to performance. RM announced the terms of its latest Tender Offer (as part of the company’s managed wind down), which will see approximately £12.4 million returned to shareholders in May at the prevailing NAV of 74.77p per share.

The most significant event during the period, impacting renewable energy generators, was news that the UK government intends to remove Carbon Price Support from April 2028 alongside plans to delink electricity costs from gas prices (gas being the marginal price setter for electricity most of the time). While a removal of CPS - a carbon tax paid by emitters which results in higher electricity prices - was already factored into the price curves used by renewable energy generators, the timing of the removal is generally more aggressive than expected and will be a slight detractor to future cash flow expectations. For context, Greencoat UK Wind and The Renewables Infrastructure Group expect the impact on NAV per share to be -2.1p (~1.5%) and -0.3p (~0.3%), respectively. With regards to delinking electricity costs from gas prices – the stated aim being to reduce volatility in electricity prices for consumers – the government has proposed an extension of Contracts for Differences to operational ROC-accredited assets (to be called “Wholesale CfDs”) whereby generators can voluntarily accept WCfDs, retain ROC payments and remove merchant price exposure. Details will not be forthcoming for some time, but there is a reasonable chance that WCfDs could be a net positive (or at least not a negative): while price and duration are yet to be announced, they will need to be sufficient to encourage generators to adopt them, and the prospect of greater revenue certainty could potentially prove beneficial in terms of lowering both the discount rate ascribed to future cash flows and financing costs.

The Fund added to Renew Holdings, averaging down against prevailing book cost. Positions in 3i Infrastructure, Cordiant Digital Infrastructure, GCP Infrastructure Investments, HICL Infrastructure, and Sequoia Economic Infrastructure were all reduced during the period.