Sequoia Economic Infrastructure Income Fund Limited (LON:SEQI) has announced its Half Year Results for the financial period ended 30 September 2025
Strong first half performance
| Financial Highlights to | 30 September 2025 | 31 March 2025 |
| Total net assets | £1,440,762,604 | £1,439,188,600 |
| Net Asset Value (“NAV”) per Ordinary Share* | 93.67p | 92.55p |
| Ordinary Share price* | 77.90p | 78.30p |
| Ordinary Share discount to NAV | (16.8)% | (15.4)% |
| Earnings per Ordinary Share | 4.40p | 4.26p |
| Dividends declared | 3.4375p | 3.4375p |
| Annualised dividend yield | 8.8% | 8.6% |
| ESG score of the portfolio** | 65.44 | 64.70 |
* Cum dividend
** As measured by the in-house proprietary scoring methodology
KEY HIGHLIGHTS
· Increased NAV driven by steady, predictable interest income and resilient credit performance
o NAV increased 1.12p to 93.67 (FY2024: 92.55); annualised NAV total return of 10.1%, in excess of the Fund’s target annual gross return of 8-9%
o Dividends of 3.44p per Ordinary Share, consistent with full-year target dividend of 6.875p; dividend remains fully cash covered by a factor of 1.01x (FY2024: 1.00x)
· Maintained robust, diversified portfolio credit quality, while targeting investments yielding in excess of 9%
o Prioritising operational assets (88.3% of portfolio), senior secured debt (57.2% of portfolio), and non-cyclical industries
o Reduced proportion of NPLs to 0.6% of NAV (HY2024: 5.5%) and no new NPLs recorded during the period
· Originated £213 million of new loans over the period, at a weighted average yield-to-maturity of 8.9%
o Proactive balance sheet management following higher than usual levels of loan repayments
o Use of leverage to ensure the Fund remains fully invested to minimise cash drag and take advantage of attractive £350m pipeline of potential investments
· Well positioned for falling interest rates with 61.7% of the portfolio in fixed rate investments, including the effect of interest rate hedges (FY2024: 58%), locking in current higher interest rates for longer
o Protecting the Fund’s income, and dividend cover, should interest rates fall
o Shorter weighted average maturity, increasing reinvestment flexibility as spreads evolve
· Further positive “pull-to-par” effects will be recognised over time
o A substantial amount of unrealised valuation decreases that were caused by the rapid increase in term rates over recent years are likely to be reversed
o Pull-to-par upside of 3.1p per share (to 30 September 2028)
· Continued proactive management of share price discount to NAV with share buyback programme
o Maintained balanced but flexible approach to capital allocation with 17.0 million Ordinary Shares purchased over the period at a total cost of £13.2 million
o 213.2 million Shares repurchased since the beginning of the programme
o Programme adapts based on portfolio liquidity, discount to NAV and other market factors
· ESG score of the portfolio increased, rising to 65.44 (FY2024: 64.70)
o Driven by selective investment activity and steady progress of the Fund’s borrowers in enhancing their sustainability performance and reporting
James Stewart, Sequoia Economic Infrastructure Income Fund Chair, commented:
“SEQI’s strong performance over the first half reflects the resilience of our diversified portfolio and the stability of our income generation, despite challenging market conditions. We expect dividend cover to strengthen over the second half, primarily due to the timing of income recognition and as we redeploy repaid capital into higher-yielding opportunities.
We remain frustrated by the current level of discount and, although we do not believe it reflects SEQI’s long-term prospects, the resilience of our investment portfolio or our ability to generate attractive returns, reducing the discount remains a Board priority. We will continue to balance the use of available cash, including proceeds from loan repayments, between new originations and share buybacks.
As global demand for infrastructure capital remains high, we will maintain our disciplined approach to investing in our active pipeline of high-quality opportunities and continue to deliver sustainable value for shareholders.”
Randall Sandstrom, Director and CEO/CIO, SIMCo, said:
“The combination of easing short-term rates and a higher for longer outlook create a favourable environment for SEQI’s absolute return strategy. In addition, improving asset valuations and reinvestment into higher-yielding opportunities are expected to support future returns.”
