John Laing Infrastructure concerned about secondary market prices

John Laing Infrastructure’s results for the period ended 31 December 2014 have been published. Its net asset value rose by 2.3% to 109.3p. A combination of dividends and a rising premium helped push the total shareholder return up to 12.6%. They increased the final dividend by 3.85% to 3.375p making a total dividend of 6.625p for the year.

The portfolio should have grown in value by 7.8% according to the valuation model but the actual growth was 9.2%. 0.8% of the extra performance came from their portfolio management activities and 0.6% from changes to economic assumptions (about things like inflation and interest rates). They now assume a discount rate of 7.94% when valuing their investments.

They are worried about pricing in their industry saying, “Our opinion is that the secondary market in the UK is showing signs of reaching a valuation peak, with evidence of some investors chasing prices in order to invest.”

JLIF : John Laing Infrastructure concerned about secondary market prices