3i Infrastructure (3IN) has announced its results for the six months to 30 September 2023. The company generated a total return of 6.3% on opening NAV for the first half of the year, ahead of the target return of 8% to 10% per annum. The portfolio overall is performing robustly and ahead of expectations. During the period, the company agreed to the sale of Attero at a c.31% uplift to its March 2023 valuation, demonstrating the resilient demand from private market investors for high-quality infrastructure investments.
Commenting on the results and the outlook for the company, the managing partners noted:
“3i Infrastructure’s portfolio once again exceeded its target return during the period, further demonstrating its quality and resilience. The portfolio is structurally positioned to deliver growth in real terms throughout the economic cycle. The c.31% value uplift achieved by the Attero exit illustrates the robust demand for high-quality, core-plus infrastructure companies amongst private market investors. It also extends our realised investment track record to a weighted average IRR of 21% since 3i Infrastructure’s inception in 2007. This is truly exceptional performance.
“We are encouraged by the strength in earnings growth across the portfolio, particularly evident in our larger companies, which we expect will continue to benefit from the structural tailwinds underpinning the original investment theses. We continue to work closely with our portfolio company management teams to maximise value creation throughout our ownership. This includes defining strategy, supporting M&A activity, capital structuring, identifying and executing further growth investments, and ultimately preparing and leading exit processes.
“The value of our active management approach is apparent across our portfolio. We see evidence in the strength of the earnings our companies are achieving, in the quality and motivation of our management teams, in the outcomes we have achieved on exits such as Attero and also in our portfolio company debt management activities. Our portfolio has no material near-term refinancing exposure because we proactively secured long duration debt structures whilst interest rates were at historical lows. The portfolio also continues to demonstrate real return protection through its positive value correlation to inflation.
“Fixed interest products are now offering their highest returns for the last 15 years, driving a rebalancing of investors’ portfolio weightings. In our view, 3i Infrastructure’s core-plus portfolio displays an attractive return premium to fixed income products, which is typically not evident in PPP/PFI concessions or core infrastructure. 3iN’s return profile continues to be attractive and relevant, even in a changing market environment.
“During the period, we extended the maturity of the Company’s £900 million Revolving Credit Facility (‘RCF’) by an additional 12 months, to November 2026, providing further flexibility for us to manage investment and divestment activity.
“Proceeds from the Attero sale will be applied to reduce the outstanding RCF balance.”
3IN : Continued growth for 3IN