Premier Global Infrastructure has much better 2019 – 2019 was a much improved year for the Premier Global Infrastructure Trust. The portfolio’s total return, measuring the return on the portfolio including all income and costs was 19.0%. The company’s capital structure, geared by its zero dividend preference shares, amplified the gain resulting in a total return on net assets to ordinary shareholders of 38.9%. However, the portfolio’s return did not match a performance benchmark of the FTSE Global Core Infrastructure 50/50 Total Return Index, which returned 21.2%.
Generally, developed markets out-performed emerging, and larger companies out-performed smaller ones. This is the principal reason for PGIT’s underperformance. Dollar strength/Renminbi weakness was also a factor. The yield equities segment of the portfolio performed very well in 2019, with an average return of 35.1% and generated a 13.5% contribution to the total return on the portfolio. Yieldcos and investment companies also did well with returns of 35.8%. Brazil’s Sanepar did particularly well, returning 62.9% over 2019. Renewable energy investments also performed very well, with a standout performance from Brookfield Renewables, which returned 83.2% in 2019.
By contrast, the growth equities part of the portfolio took 3.2% off the total portfolio return. This includes disappointing returns from some Chinese, Indian, Middle Eastern and Southeast Asian investments. The manager remains confident in the long-term outlook for these.
Continuation vote
There is a continuation vote at this year’s AGM and the directors are urging shareholders to vote in favour of continuation – pointing to the 12.2% a year returns delivered to shareholders since May 2012 when the current manager took on responsibility for the trust. Once that hurdle is out of the way, the board needs to come up with proposals around the maturity of the zero dividend preference shares later this year. Further details will be provided later this year, we expect once continuation is secured.