Questor on 3i Infrastructure – There’s a bargain to be had while markets misjudge this infrastructure trust
With a track record of 3-6x returns, the vehicle has earned its stripes
As readers will be well aware, sometimes even the most reliable, well-run company can fall out of favour. How you react to that as an investor will depend on your mindset. Questor sees an investment trust trading at an unusually wide discount to net asset value (Nav) and wonders whether there is a bargain to be had – 3i Infrastructure might fit that description.
The trust was launched in 2007 and, adjusting for a hefty special dividend in 2018, the Nav and the dividend have made fairly steady positive progress ever since. The average annual Nav total return over the past 10 years is just shy of 14pc and the dividend has risen from 7p to 12.65p over that period.
Thanks in part to that track record the shares have tended to trade at a substantial – perhaps excessive – premium to Nav for most of the company’s life. However, that changed in September 2022 and today the discount to Nav is around 15pc. The net effect of this change in the rating is that the share price has made little to no headway over the past three years.
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