James Carthew: CORD’s discount has much further to narrow
Cordiant Digital Infrastructure has had a strong few years, but investors are sceptical that demand for data centres has been overexaggerated.
In many ways, Cordiant Digital Infrastructure (CORD) is one of the investment company sector’s great success stories. Today, it is a £949m market cap company, and in both NAV and share price terms, it is the best-performing trust in the AIC’s infrastructure sector over the past three years. The discount has narrowed from a 48% peak in 2024 to around 15% today. However, I feel that this is still too wide.
For over a year after its February 2021 launch, CORD traded at a premium, which allowed it to raise more money through two C share issues and encouraged holders of its subscription shares to exercise them. Following a familiar pattern for alternative asset investments, the shares moved to trade at a discount around the time that interest rates started to climb in 2022.
In CORD’s case, the problem was compounded by the collapse of Digital 9 Infrastructure (DG19), which cast a shadow over the investment case for digital infrastructure.
CORD has had to work hard to rebuild confidence. It has helped a great deal that the investment manager – Steven Marshall – has put substantial sums of his own money into buying CORD shares. He now owns over 15.5m, worth about £19m.
The numbers provide little justification for the market’s earlier panic. The company has grown its NAV every year from launch (about 11.3% annualised) and… read more here