GCP Infrastructure Investments is a Jersey-incorporated, closed-endedwhose shares are traded on the of the London Stock Exchange. It aims to provide its shareholders with regular, sustained, long-term distributions and to preserve capital over the long term by generating exposure primarily to UK infrastructure debt and related and/or similar assets which provide regular and predictable long-term cashflows.
Since its launch in 2010, it has provided its investors with a high and stable stream of quarterly distributions (these have totalled 7.6p per year, for the last seven years). The fund’s income is derived from loaning money at fixed rates to entities which derive their revenue, or a substantial portion of it, from UK public-sector backed cashflows, such as subsidies. Wherever it can, it tries to secure an element of inflation-protection.
In practice, GCP has exposure to renewable energy projects (where revenue is part subsidy and part linked to sales of power), private finance initiative (PFI) and public-private partnership (PPP)-type assets (whose revenue is predominantly based on the availability of the asset, that is the owner gets paid if the asset is available for use and maintained to agreed standards, rather than say based on the level of demand or usage) and specialist supported housing (where local authorities are renting specially-adapted, residential accommodation for tenants with special needs).
We have written a note which explains the workings on the fund and the sectors that it invests in – Stable income, uncertain times