Gcp Infrastructure Inves... Share Discussion Threads

[catabrit] 25/10/2023 13:25

Bought some of this as part of my high yield basket. Feels cheap and pretty safe.

[donald pond] 25/10/2023 09:28

Very good interview, well spotted

[jimjamthe2nd] 24/10/2023 19:17

Phil Kent(lead adviser to GCP) is on this podcast I listen to and he says "there should be upward pressure on the dividend, if the portfolio continues to perform" which sounds very reassuring to me.

[donald pond] 24/10/2023 10:54

Yes, that too. The economy doesn't work at this level of inflation

[hindsight] 24/10/2023 10:03

donald I take same view from the other side, there wont be many projects started now if this is the new cost of capital

[donald pond] 24/10/2023 08:33

TBH Chucko I can't imagine there will be many new investments when they can buy back at this discount. And the buybacks of course improve the dividend coverage.

[chucko1] 23/10/2023 17:32

On GCP dividends, on the surface it says they are covered 0.80x. However, this is EPRA cover which includes the effect of rate rises and hence reduction in value of fixed income (fixed rate) instruments.

They cite an alternative measure which indicates basically full cover. This is correct and is the one that makes sense to use. Of course, a fixed dividend of 12pps loses value in a rising rate environment, and that is they way to consider this investment, ceteris paribus. I suspect that there will be some additional accretion to NAV as they earn higher rates on the new lending and keep paying "only" the 12pps. It remains to be seen if this offset in part (or worse) boy any credit provisions higher rates statistically induce. Their track record in this regard is very good, though. These are smart people, not moron lenders à la Halifax or RBS. (and these are not even the worst).

[fordtin] 23/10/2023 16:15

If Gillian Didham is his missus, it shows a lot more confidence than buying them in his own name!

[hpcg] 23/10/2023 16:13

One thing is for sure, the water behind hydro dams is going to be significantly higher than it was a week ago. Loch Ness is now back well within its normal range. I guess most reservoirs will continue to rise as water makes its way down hill.

[cc2014] 23/10/2023 15:40

Chair buys £25k of shares.

Enough to show some level of confidence. I hope...

[donald pond] 23/10/2023 08:55

Not sure why dividend would be cut tbh. It has always been tight in terms of coverage but there are linkages to inflation which should give them scope to stick at 7p.

[panshanger1] 23/10/2023 08:44

Finals and investment report December last year Probably going to see a dividend cut for next year ?

[speedsgh] 23/10/2023 07:46

Company update and net asset value(s) -

Net Asset Value

GCP Infra announces that at close of business on 30 September 2023, the unaudited net asset value per ordinary share of the Company was 109.79 pence (30 June 2023: 110.02 pence), a decrease of 0.23 pence per ordinary share. The net asset value takes into account cash, other assets, accrued liabilities and expenses and leverage of the Company attributable to the ordinary share class.

As announced on 15 May 2023, the Company completed a refinancing of two existing loan notes secured against two waste-wood biomass projects, valued at c. £85 million as at 31 March 2023 and committed to a new £50 million loan note as part of a syndicated facility supporting the same, and one additional, biomass project. Including prepayment fees and valuation impacts totalling c. £10 million, this refinancing generated £50 million of net cash proceeds that were used to repay the Company's revolving credit facility and led to a c. 1.2 pence per ordinary share uplift to the Company's net asset value, predominantly from prepayment fee income received. At 30 September 2023, the Company had £104 million (30 June 2023: £154 million) outstanding under its revolving credit arrangements.

A period of very low wind speeds and exceptionally dry weather in England and Scotland has decreased actual cash distributions to the Company from its renewables investment portfolio, negatively contributing c. 1.2 pence per ordinary share to the movement. Further reductions in electricity prices continue to decrease actual and forecast cash distributions to the Company from its renewables investment portfolio driven by decreases in short-term power prices as a result of lower European gas demand, an ample supply of LNG, unseasonably mild weather and significant reductions in UK carbon prices leading to a wider price disconnect between the UK emissions trading scheme and the equivalent EU scheme. This is partially offset by the positive performance of the Company's hedging arrangements, therefore overall net movements negatively contributed c. 0.5 pence per ordinary share.

Various other downward movements across the portfolio totalled c. 0.4 pence per ordinary share, offset by updates for actual inflation that contributed c. 0.7 pence per ordinary share. As advised by the Company's independent valuation agent, discount rates remained unchanged this quarter, following the c.40bps increase in the weighted average discount rate used by the Company to value its portfolio at 30 June 2023...

... Portfolio

Notwithstanding the lower electricity price forecasts, the portfolio continues to perform materially in line with the Company's expectations. The Company's mature, diverse and operational portfolio provides defensive access to income against a backdrop of market volatility and uncertainty. It is the view of the Company that the long-term and structural demand for infrastructure, and particularly infrastructure debt, offers investors an attractive exposure to an asset class whose performance is non-correlated to wider markets and benefits from long-term and partially inflation protected income. Further portfolio information is available at: www.graviscapital.com/funds/gcp-infra/literature, including a line-by-line breakdown of the investment portfolio and underlying assets that has been made available during the quarter and will be updated by the Company periodically.

[donald pond] 12/10/2023 09:00

The old guard sold a chunk of Gravis to a Japanese house Orit 3/4 years ago. It may be that as AUM drops with DIGS now gone and GABI to follow Orit can manage the CFO function. But as we've discussed in several places the business model for alternatives is based on raising funds at a premium and origination. Gravis did have a good operational team though.

[williamcooper104] 12/10/2023 08:46

There's been a lot of personal moves as Gravis Not a good sign

[speedsgh] 12/10/2023 08:33

Probably of little relevance but thought it worth mentioning. Picton Property Income (PCTN) have today announced the appointment of Saira Johnston as CFO effective 1/4/24. Saira's most recent appointment has been as CFO of Gravis Capital Management Ltd.



Saira is not listed amongst the senior team on the Gravis Capital website which may indicate that she has already left her role there, even though her LinkedIn profile still lists her as CFO at Gravis. The CEO & CIO are listed but no mention of a CFO which indicates the change may have been recent?

[mwj1959] 10/10/2023 10:44

Given share price performance perhaps not a surprise to see them beefing up their corporate broker support.

[donald pond] 06/10/2023 16:59

There is a subtext here which is that the Japanese house Orix bought a chunk of Gravis at the height of the market and have since seen DIGS bought out and all the other funds fall out of favourPhil Kent runs GCP and GABI and is very diligent. It's just a very out of favour sector but even so, a near 11% yield that looks sustainable to me is surely attractive

[hpcg] 06/10/2023 11:23

A new manager coming in and changing the mandate would be utterly disastrous for the NAV. For a start I have money here because it isn't a property debt fund. For the most part, and as seen against every single long duration debt class, including government bonds, there is literally nothing the manager could have done to prevent the market price adjustment. We should judge managers on bad debts, nimbleness in trading in and out of undervalued or overvalued assets, fees and to a degree communication. Interest rate risk is on our shoulders as investors.

[williamcooper104] 06/10/2023 02:55

Makes sense because they've taken equity risks in a supposed debt fund, screwed up their ROCs and our running a c0.7x cash covered dividend; and that's after cutting it a few years ago

[apollocreed1] 06/10/2023 02:41

hxxps://oilprice.com/Alternative-Energy/Renewable-Energy/Hawkish-Fed-Triggers-Renewable-Stock-Drop-Despite-Bidens-Backing.html

The renewable energy sector tends to be highly sensitive to interest rates because clean energy projects require developers to borrow lots of capital up front to build projects. To make matters even more complicated, the cost of electricity generated from renewable energy tends to be impacted much more by rising interest rates compared to electricity generated from fossil fuels.

Indeed, a 2020 analysis from the International Energy Agency found that a 5% rise in interest rates increases the levelized cost of electricity from wind and solar by a third but only marginally for natural gas plants

[apollocreed1] 06/10/2023 02:33

@williamcooper- Why does it make sense? The management have been fine here. The share price drop is irrational.

[williamcooper104] 05/10/2023 23:10

Changing the manager of both trusts does make a lot of sense

[cc2014] 05/10/2023 11:26

Schroders proposed taking over the investment mandate of GCP Asset Backed Income (GABI) from Gravis earlier this year, after the trust was hit by two sudden fund manager departures and a set of bad loans, Investment Week understands.
Sources with knowledge of the matter told Investment Week that Schroders' investment trusts sales team approached a number of shareholders at the beginning of 2023 to gather their views on potentially taking over the mandate.

The proposal included shifting the trust's investment strategy to focus on real estate debt, with the firm's $88bn private assets arm, Schroders Capital, pitched to run the mandate.

The firm also approached the board, the sources said.


Continues...


If I'm any judge of this changing the mandate to focus on property loans would have been too far a jump for shareholders.

[donald pond] 04/10/2023 09:45

Volume has been building though. Hopefully seller running out