REG - 3i Infrastructure - Results for the year to 31 March 2025
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RNS Number : 7809H 3i Infrastructure PLC 08 May 2025
8 May 2025
Results for the year to 31 March 2025
3i Infrastructure plc ('3i Infrastructure' or the 'Company') today announces a
10.1% return for the year, delivery of the FY25 dividend target of 12.65 pence
per share and a 6.3% increase in the target dividend for FY26 to 13.45 pence
per share.
Richard Laing, Chair of 3i Infrastructure plc, said:
"3i Infrastructure continues its long track record of delivering sustainable
returns through investing in resilient businesses. I am pleased to report a
total return of 10.1% in the year ended 31 March 2025, ahead of our target.
Over the long term, we have consistently met or outperformed our return
objective, and we have increased the dividend per share in every year of the
Company's existence."
Bernardo Sottomayor, Managing Partner and Head of European Infrastructure, 3i
Investments plc, added:
"Our investment strategy continues to deliver superior returns through the
economic cycle. The portfolio overall has proved resilient and we continue to
see good earnings momentum."
Performance highlights
Outperformed our target return of 8-10% p.a. 10.1%
Total return on opening NAV
£333m
Total return for the year
£3,562m
NAV
386.2p
NAV per share
Delivered FY25 dividend target, fully covered 12.65p
Full year dividend per share for FY25
Setting higher target for FY26 dividend, up 6.3% year-on-year
13.45p
Target dividend per share for FY26
For further information, please contact:
Richard Laing, Chair, 3i Infrastructure plc Tel: 037 1664 0445
Thomas Fodor, investor enquiries Tel: 020 7975 3469
Kathryn van der Kroft, press enquiries Tel: 020 7975 3021
For further information regarding the announcement of the results for 3i
Infrastructure plc, please visit www.3i-infrastructure.com. A recording of the
analyst presentation will be made available on this website during the day.
Notes to the preliminary announcement
Note 1
The statutory accounts for the year to 31 March 2025 have not yet been
delivered to the Jersey Financial Services Commission. The statutory accounts
for the year to 31 March 2024 have been delivered to the Jersey Financial
Services Commission. The auditor's reports on the statutory accounts for these
years are unqualified. This announcement does not constitute statutory
accounts. The preliminary announcement is prepared on the same basis as set
out in the statutory accounts for the year to 31 March 2024.
Note 2
Subject to shareholder approval, the proposed final dividend is expected to be
paid on 11 July 2025 to holders of ordinary shares on the register on 13 June
2025. The ex-dividend date for the final dividend will be on 12 June 2025.
Note 3
This report contains Alternative Performance Measures ('APMs'), which are
financial measures not defined in International Financial Reporting Standards
('IFRS'). More information relating to APMs, including why we use them and the
relevant definitions, can be found in the Company's 2025 Annual report and
accounts and in the Financial review section.
Note 4
The preliminary announcement has been extracted from the Annual report and
accounts 2025. The Annual report and accounts 2025 will be available on the
Company's website today. Printed copies of the Annual report and accounts 2025
will be distributed to shareholders who have elected to receive printed copy
communications on or soon after 22 May 2025.
Notes to editors
About 3i Infrastructure plc
3i Infrastructure plc is a Jersey-incorporated, closed-ended investment
company, an approved UK Investment Trust, listed on the London Stock Exchange
and regulated by the Jersey Financial Services Commission. The Company's
purpose is to invest responsibly in infrastructure, delivering long-term
sustainable returns to shareholders and having a positive influence on our
portfolio companies and their stakeholders.
3i Investments plc, a wholly-owned subsidiary of 3i Group plc, is authorised
and regulated in the UK by the Financial Conduct Authority and is the
investment manager of 3i Infrastructure plc.
This statement has been prepared solely to provide information to
shareholders. It should not be relied on by any other party or for any other
purpose. It and the Company's Annual report and accounts may contain
statements about the future, including certain statements about the future
outlook for 3i Infrastructure plc. These are not guarantees of future
performance and will not be updated. Although we believe our expectations are
based on reasonable assumptions, any statements about the future outlook are
subject to a number of risks and uncertainties and could change. Factors which
could cause or contribute to such differences include, but are not limited to,
general economic and market conditions and specific factors affecting the
financial prospects or performance of individual investments within the
portfolio of 3i Infrastructure plc.
This press release is not for distribution (directly or indirectly) in or to
the United States, Canada, Australia or Japan and is not an offer of
securities for sale in or into the United States, Canada, Australia or Japan.
Securities may not be offered or sold in the United States absent registration
under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or
an exemption from registration under the Securities Act. Any public offering
to be made in the United States will be made by means of a prospectus that may
be obtained from the issuer or selling security holder and will contain
detailed information about 3i Group plc, 3i Infrastructure plc and management,
as applicable, as well as financial statements. No public offering in the
United States is currently contemplated.
Welcome
Growing infrastructure businesses.
We invest in resilient businesses
that combine strong downside
protection with exciting growth prospects.
Our controlling stakes allow us to
drive value creation strategies.
We have repeatedly sold these stakes above
holding value, delivering superior returns
to shareholders.
Chair's statement
"We have built a unique, resilient and growing portfolio of businesses."
Richard Laing
Chair, 3i Infrastructure
3i Infrastructure continues its long track record of delivering sustainable
returns
through investing in resilient businesses.
I am pleased to report a total return of 10.1% in the year ended 31 March
2025, ahead of our target to provide shareholders with a total return of 8% to
10% per annum. This performance continues our long track record of delivering
strong, sustainable returns and demonstrates the effectiveness of our
investment strategy. Over the long term, we have consistently met or
outperformed our return objectives. Furthermore, we have increased the
dividend per share every year since the Company's inception in 2007,
reflecting our objective to deliver growing income alongside capital growth
for our shareholders.
While the Company delivered a solid performance this year, it was set against
the backdrop of a persistently challenging listed market. This resulted in its
shares continuing to trade at a discount to NAV throughout the year. We remain
confident that the NAV reflects the intrinsic value of the portfolio. The sale
of Valorem and the syndication of Future Biogas, both completed during the
year at premiums to NAV, support this assessment, providing evidence of the
underlying value and quality of the portfolio.
The Company is differentiated within the listed infrastructure sector. We have
built a diversified portfolio of businesses that are closely aligned with
long-term megatrends, positioning us to achieve sustained value creation over
time. The quality and defensive characteristics of the portfolio were evident
through the recent periods of low economic growth with high inflation and
energy prices as well as rising interest rates. Leveraging the active asset
management expertise and investment discipline of 3i, our Investment Manager,
these businesses are generating a strong pipeline of attractive and accretive
growth opportunities.
A dedicated ESG team within the Investment Manager works closely with our
portfolio companies, providing expertise and support as they develop and
implement their sustainability strategies, which we believe are a core pillar
of long-term value creation.
I would like to thank the Investment Manager's team for their continued
dedication and high-quality execution, as well as our shareholders and the
Board of Directors for their ongoing support throughout the year.
Our purpose
Our purpose is to invest responsibly in infrastructure, delivering long-term
sustainable returns to shareholders and having a positive influence on our
portfolio companies and their stakeholders.
We invest across a broad spectrum of infrastructure themes, and in this report
we highlight the strong growth trajectories of our portfolio companies. Our
portfolio companies invest in, develop and actively manage essential
infrastructure. The progress of our portfolio companies along their defined
sustainability pathways is detailed in the Sustainability section of the
Annual report and accounts 2025.
Performance
The Company generated a total return of £333 million in the year ended 31
March 2025, or 10.1% on opening NAV, ahead of our target of 8% to 10% per
annum to be achieved over the medium term. This is discussed in more detail in
the Review from the Managing Partner.
The NAV per share increased from 362.3 pence to 386.2 pence. Our share price
has not kept pace with the growth in our NAV, which resulted in a Total
Shareholder Return ('TSR') of 1.3% in the year, slightly ahead of that of the
FTSE 250, which returned 1.1% in the same period. Since the IPO, the Company's
annualised TSR is 10.9%, comparing favourably with the broader market (FTSE
250: 6.0% annualised over the same period).
Dividend
Following the payment of the interim dividend of 6.325 pence per share in
January 2025, the Board is recommending a final dividend for the year of 6.325
pence per share, meeting our target for the year of 12.65 pence per share,
6.3% above last year's total dividend. We expect the final dividend to be paid
on 11 July 2025.
Consistent with our progressive dividend policy, we are announcing a total
dividend target for the year ending 31 March 2026 of 13.45 pence per share,
representing an increase of 6.3%.
Annual General Meeting ('AGM')
This year's AGM is scheduled to be held on 3 July 2025. Further details can be
found in the Notice of Meeting and on the Company's website,
www.3i-infrastructure.com.
Board changes
We were pleased to welcome Milton Fernandes as a non-executive Director in
July 2024, followed by Lisa Gordon in March 2025. Both bring wide-ranging and
extensive skills and expertise which will be hugely valuable to the Company.
Outlook
Our strategy focuses on investing in resilient infrastructure businesses
providing essential services to their customers and the communities they
serve. Alignment with long-term megatrends supports the growth of our
portfolio companies, and over time we expect to realise our investments at
attractive valuations and recycle the capital. This approach was demonstrated
over the past year through the sale of Valorem and the syndication of Future
Biogas. These transactions, together with a number of large distributions from
portfolio companies, enabled us to significantly reduce the outstanding
drawings on the Company's revolving credit facility ('RCF').
With an improved liquidity position, we expect to continue to support the
accretive growth opportunities we see within our existing platform investments
while also exploring a growing pipeline of new investment prospects. We remain
committed to a disciplined investment strategy and to prudent balance sheet
management.
We enter FY26 with a unique, resilient and growing portfolio of businesses
that are well placed to navigate periods of market disruption.
Richard Laing
Chair, 3i Infrastructure plc
7 May 2025
2007 to 2025
In the 18 years since the IPO,
the Company has delivered a total
shareholder return of:
10.9%
per annum
Review from the Managing Partner
"Our portfolio continues to deliver superior returns through the economic
cycle."
Bernardo Sottomayor
Managing Partner and Head of European Infrastructure
3i Investments plc
Our investment strategy continues to deliver compounding growth dynamics and
attractive risk-adjusted returns.
We delivered a total return this year of 10.1% and met our dividend target for
the year. The portfolio overall has proved resilient and we continue to see
good earnings momentum. The performance of individual portfolio companies is
discussed in the Portfolio review section.
Since 2015, when I joined the business, our strategy has focused on investing
in attractive core-plus infrastructure investments in structural growth
markets and this has delivered NAV per share growth, including dividends, of
17% per annum.
The Company has consistently demonstrated the effectiveness of its
value-creation model through disciplined origination of attractive
opportunities, active asset management, and the successful execution of exit
strategies. The realisation of Valorem in January 2025, delivering a gross IRR
of 21% and a gross money multiple of 3.6x, is a good illustration of the
Company's ability to unlock significant value for shareholders. Further
details on this investment can be found below. The proceeds received from this
realisation supported a material reduction in net debt for the Company.
We have a long track record of delivering accretive realisations, with our
overall performance consistently ranking us ahead of other listed
infrastructure funds. We have built a well-diversified portfolio across
sectors, geographies and risk profiles, that is strategically positioned to
benefit from long-term structural growth trends and to remain resilient across
economic cycles.
Active management
Our proven active asset management approach plays a central role in driving
value. We work closely with the management teams of our portfolio companies to
implement value-enhancing initiatives - ranging from geographic and market
expansion to targeted bolt-on acquisitions and optimising capital structures.
During the year, we selectively reinvested capital into some of our existing
portfolio companies. We invested £30 million in Future Biogas to acquire
majority control of a portfolio of six Anaerobic Digestion ('AD') plants and
£20 million in DNS:NET to fund its fibre network rollout. We also completed
the successful refinancing of five portfolio companies on attractive terms,
providing them with enhanced flexibility to fund capital expenditure. This not
only supports their 2025 growth ambitions but also highlights the strong
demand and confidence from lenders in our portfolio.
We maintain a disciplined and prudent stance on leverage. The average gearing
across the portfolio stands at a modest 35% (2024: 32%) of enterprise value,
with no material refinancing requirements until 2028. Strong operational cash
flows and earnings growth from portfolio companies have driven income to the
Company in excess of expectations and this, combined with available liquidity
through our RCF, positions us well to support further growth investments as
opportunities emerge.
This disciplined combination of sustained earnings growth and investment in
value-accretive capital expenditure ('capex') supports a compounding growth
effect - delivering attractive, risk-adjusted returns for shareholders over
the long term.
Transaction activity
During the year, we completed a number of transactions as shown in the table
below:
Date Activity
August 2024 Investment of a further £30 million in Future Biogas to acquire majority
control of a portfolio of six AD plants
September 2024 Syndication of 23% stake in Future Biogas to RWE Energy Transition Investments
('RWE')
January 2025 Sale of Valorem for £257 million
January 2025 Investment of a further £20 million to fund DNS:NET's fibre roll-out
programme
Competitive landscape
A number of private infrastructure managers have shifted from core to
core-plus investment strategies over time. This increases the universe of
potential buyers for 3iN's existing investments. We have also seen a number of
high-profile private market manager acquisitions, such as BlackRock's
acquisition of Global Infrastructure Partners and the £1 billion takeover of
BBGI Global Infrastructure by Canada's British Columbia Investment Management
Corporation. This is in anticipation of rapid growth in the sector.
Environmental, Social and Governance ('ESG')
Our dedicated ESG team continues to play a strategic role in supporting our
portfolio companies along their sustainability pathway. More information can
be found in the Sustainability section of the Annual Report and Accounts 2025.
Through regular engagement with management teams on key sustainability topics
and monitoring performance through our annual ESG survey, we are actively
encouraging the embedding of ESG considerations into operational and
governance practices across the portfolio.
During the year, we delivered tailored training and practical tools to
portfolio companies with a particular focus on aligning with the relevant
principles introduced by the Corporate Sustainability Reporting Directive
('CSRD') and strengthening human rights practices.
In March 2024, 3i Group plc's ('3i Group') near-term emissions reduction
targets received validation from the Science Based Targets initiative
('SBTi'), reinforcing its commitment to align the companies it manages with
transition to a low-carbon economy. To date, two 3iN portfolio companies have
achieved SBTi validation for their emissions reduction targets, with two
additional companies awaiting validation.
In the year ahead, we will focus on enhancing the quality and coverage of
portfolio companies' emissions data, with a particular emphasis on Scope 3
greenhouse gas ('GHG') emissions estimates. We will also continue to support
the development and refinement of decarbonisation plans and emissions
reduction targets across the portfolio.
Outlook
Our portfolio has been deliberately constructed to comprise high-quality
companies that are underpinned by long-term structural growth trends. We
believe the inherent strength and defensive characteristics of our assets
position the portfolio to deliver attractive returns across varying economic
conditions. This resilience has been clearly demonstrated through recent
periods of elevated inflation, energy price volatility, rising interest rates,
and earlier during the Covid-19 pandemic.
Based on our current assessment of the portfolio, made in conjunction with
portfolio company management, we expect limited direct exposure to the recent
US tariff announcements. The outlook is still uncertain and we will continue
to monitor developments.
Our strategy is focused on generating sustainable long-term returns through
consistent earnings growth and disciplined, value-accretive capital investment
- largely funded through the cash generation of our portfolio companies. This
growth model, coupled with the scarcity value of our high-quality
infrastructure assets, underpins our confidence in the portfolio's ongoing
potential to create value for shareholders.
Bernardo Sottomayor
Managing Partner and Head of European
Infrastructure, 3i Investments plc
7 May 2025
Realisation
Valorem
Delivering another strong outcome
"This sale crystallises significant value, reflecting Valorem's transformation
into a leading European renewable energy company."
Thomas Fodor
Partner, 3i Investments plc
In January 2025, we successfully sold our 33% stake in Valorem, a leading
independent renewable energy company. During our investment period, the
company transitioned from a pure developer to an integrated owner-operator,
usually retaining ownership of developed projects and building a base of
long-term predictable cash flows. The exit crystallised a gross IRR of 21% and
a 3.6x money multiple.
Net proceeds received
€310m
Gross IRR
21%
Return on investment (Total cash return over cost)
3.6x
Transforming Valorem into a leading renewables platform
We acquired a 28.5% stake in 2016 via a bilateral process. Since then, Valorem
has evolved into a diversified, pan-European renewables platform with strong
infrastructure characteristics.
Investment highlights:
• Strengthened infrastructure characteristics
- Increased the share of EBITDA under long-term contracts to enhance cash
flow visibility.
• 4x EBITDA growth
- Driven by scaling the platform and retaining developed assets.
• Developer to owner
- Shifted the model to retain ownership of projects, building long-term
value.
• 5.4x growth in generation capacity
- Now over 850MW in wind, solar and hydro across Europe.
• Development pipeline expanded 10x
- From 650MW to 6.6GW, including new partnerships in Poland and Sweden.
• Broadened technology and geography
- Diversified from French onshore wind into solar and hydro, with
presence in Finland, Greece and beyond.
• Commissioned the Viiatti Wind Project in Finland
- This 313MW project supplies 1.2% of Finland's annual electricity.
• Storage-ready strategy
- Introduced battery storage to optimise power delivery and grid support.
Our business model
Introduction
Unique offering for shareholders
The Company remains unique, providing public market investors with access to
private infrastructure businesses across a variety of megatrends, sectors and
geographies.
Investment discipline
We acquire private businesses that provide essential infrastructure services
with good downside protection while exposed to growth trends. We remain a
disciplined investor and seek opportunities to transact off-market, only
participating in competitive processes where we believe we have a distinct
advantage.
We have an infrastructure-focused investment team, with an extensive network
and access spanning the geographies where we invest. Our reputation, local
presence and the relationships we develop with management teams provide us
with competitive advantages.
Active asset management
We maintain a significant focus on active asset management and investment
stewardship. We identify high-calibre management teams and look to implement a
clear business strategy. We help identify accretive growth opportunities with
the portfolio companies, and actively support them to deliver those
opportunities, including executing add-on M&A and putting in place
adequate capital structures and capex facilities to fund the associated
investments.
We actively seek to enhance the infrastructure characteristics of the
businesses we acquire, ensuring that, where possible, we direct capex toward
immediate contracted revenue-generating assets, improving the infrastructure
characteristics of the business to attract competitive financing, adding
elements of service that create customer stickiness, and often implementing
operational efficiency programmes to optimise EBITDA margins. All of this
helps us maximise the potential exit value. An example of this approach is the
recent realisation of Valorem, as discussed above.
We typically execute all of the above through ownership control, ensuring
appropriate Board representation and composition, direct involvement in the
companies' key workstreams, and incentivising and aligning management teams.
Investment focus
Competition for new investments primarily comes from private infrastructure
funds. Most other UK-listed infrastructure funds typically target smaller
investments in finite-life contracted assets like operational and greenfield
Public Private Partnership ('PPP') projects or operational renewable
portfolios, which are outside our investment focus.
Our primary investment focus remains mid-market core-plus infrastructure with
controlling majority or significant minority positions and strong governance
rights, whilst adhering to a set of core investment characteristics and risk
factors.
Investment characteristics
Characteristics commonly found in our portfolio
We look to build and maintain a diversified portfolio of assets, across a
range of geographies and sectors, whilst adhering to a set of core investment
characteristics and risk factors.
The Investment Manager has a rigorous process for identifying, screening and
selecting investments to pursue. We look for businesses that combine a base of
strong cash flow resilience (for example, contracted revenues) with high
through-cycle underlying market growth fundamentals and operational
improvements, and M&A opportunities, which allows us to deliver above
target returns. Although investments may be made into a range of sectors, the
Investment Manager typically focuses on identifying investments that meet most
or all of the following criteria and are aligned with identified megatrends:
Asset-intensive business Good visibility of future cash flows
Owning or having exclusive access under long-term contracts to assets that are Long-term contracts or sustainable demand that allow us to forecast future
essential to deliver the service performance with a reasonable degree of confidence
Asset bases that are hard to replicate An acceptable element of demand or market risk
Assets that require time and significant capital or technical expertise to Businesses that have downside protection, but the opportunity for
develop, with low risk of technological disruption outperformance
Provide essential services Opportunities for further growth
Services that are an integral part of a customer's business or operating Opportunities to grow or to develop the business into new markets, either
requirements, or are essential to everyday life organically or through targeted M&A
Established market position Sustainability
Businesses that have a long-standing position, reputation and relationship Businesses that meet or are committed to meeting the criteria set out in 3i's
with their customers - leading to high renewal and retention rates Responsible Investment policy and will work with us to enhance their ESG
maturity using our sustainability pathway (see the Annual report and accounts
for more information)
How we create value
Enablers Investment characteristics How we create value
Active asset management Asset-intensive 1. Buy well 2. Strong governance 3. Optimise strategy
business • Effective use of 3i's network • Make immediate improvements • Agree strategic direction
Investment Manager's team • Comprehensive due diligence • Appropriate board representation and composition • Develop action plan
Asset bases that • Consistent with return/yield targets • Incentivise and align management teams • Establish right capital structure to fund growth plan
3i Group's network are hard to replicate • Fits risk appetite
Reputation Provide essential services
and brand
Established
Robust policies and procedures market position
Efficient balance Good visibility
sheet of future cash flows
An acceptable element of demand or market risk
Opportunities
for further growth
Sustainability
4. Execute plan 5. Realisation Delivering our strategic priorities
• Ongoing support • (Re)position business and enhance infrastructure characteristics to
maximise exit value
• Monitor performance
• Long-term view but will sell to maximise shareholder value
• Review further organic investment opportunities
• Facilitate and execute M&A
What enables us to create value
Financial outcomes Outcomes for Outcomes
for shareholders portfolio companies for lenders
10.1% 18% £392m 5
Total return on opening NAV Asset IRR (since inception in 2007) Total growth capex invested across the portfolio in the year Portfolio companies refinanced in the financial year enabling further growth
capex
12.65p 14% 21%
Ordinary dividend per share Net annualised return Valorem exit delivered a 21% gross IRR return over lifetime of the investment
(since inception in 2007)
6%
Annualised growth in ordinary dividends (since inception in 2007)
Active asset management
We create value from our investments through the Investment Manager's active
asset management approach. Through this approach, the Investment Manager
partners with our portfolio companies' management teams to develop and execute
a strategy to create long-term sustainable value. Examples of this partnership
include: developing strategies that support investment in the portfolio
company's asset base over the long term; continued improvements in operational
performance; and establishing governance models that promote an alignment of
interests between management and stakeholders.
We develop and supplement management teams, often bringing in a non-executive
chair early in our ownership.
Examples of this active asset management approach can be found on our website,
www.3i-infrastructure.com.
Strengthen Invest in and Grow our platform Dedicated
portfolio company develop companies businesses ESG team
management teams with a clear strategy through further
investments
Dedicated 3i ESG team
The ESG team's role is to ensure the Company's approach is right for the
portfolio and to drive genuine ambition and progress at portfolio company
level.
Dedicated ESG resource enables us to identify, monitor and realise the
value-creation opportunities linked to sustainability for relevant portfolio
companies more effectively and to identify and manage sustainability risks.
The team supports each portfolio company in enhancing its ESG maturity, in
line with the sustainability pathway described in the Annual report and
accounts. The team also leads ESG reporting for the Company and delivers the
annual ESG review of the portfolio.
The Investment Manager is committed to constructing and managing the Company's
portfolio in accordance with the 3i's Responsible Investment policy, which
covers a range of ESG issues.
Sustainability and ESG standards are discussed throughout the Annual report
and accounts 2025.
Our strategic ESG focus areas
Carbon Strategy and Health & safety and people
and climate leadership
Investment Manager's team
The Company is managed by an experienced and well-resourced team. The European
infrastructure team was established by 3i Group in 2005 and now comprises
approximately 40 people, including over 20 investment professionals.
This is one of the largest and most experienced groups of infrastructure
investment professionals in Europe, supported by dedicated finance, tax,
legal, operations, ESG and strategy teams.
3i Group's network
3i Group has a network of offices, advisers and business relationships across
Europe. The Investment Manager leverages this network to identify, access and
assess opportunities to invest in businesses, on a bilateral basis where
possible, and to position the Company favourably in auction processes.
Reputation and brand
The Investment Manager and the Company have built a strong reputation and
track record as investors by investing responsibly, managing their business
and portfolio sustainably, and by carrying out activities according to high
standards of conduct and behaviour. This has been achieved through upholding
the highest standards of governance, at the Investment Manager, the Company
and in investee companies. This in turn has earned the trust of shareholders,
other investors and investee companies, and has enabled the Investment Manager
to recruit and develop employees who share those values and ambitions for the
future.
The Board seeks to maintain this strong reputation through a transparent
approach to corporate reporting, including on our progress on driving
sustainability through our operations and portfolio. We are committed to
communicating in a clear, open and comprehensive manner and to maintaining an
open dialogue with stakeholders.
Robust policies and procedures
Established investment and asset management processes are supported by the
Investment Manager's comprehensive set of best practice policies, including
governance, conduct, cyber security and anti-bribery.
Efficient balance sheet
The Company's flexible funding model seeks to maintain an efficient balance
sheet with sufficient liquidity to make new investments or support portfolio
companies.
Since FY15 the Company has raised equity three times and returned capital to
shareholders twice following successful realisations. Net equity issuance over
that period was only £135 million.
Revolving credit facility
£900m
Committed
Megatrends
Megatrends significantly influence our world, affecting decision-making and
changing the demands placed on our economy and services. Identifying the
potential for growth across businesses, sectors and countries serves as a key
driver in our investment decision-making and asset management processes
We seek to diversify the Company's portfolio across a range of megatrends that
will provide a supportive environment for long-term sustainable returns to
shareholders across the economic cycle. We also continually assess underlying
risk factors, both when considering new investment opportunities and in
managing the existing portfolio and its exposure to certain risks, such as
commodity prices and foreseeable technological disruptions.
Some of these megatrends are mutually supportive, such as the need for new
power generation and fibre connectivity for artificial intelligence ('AI')
data centres.
Investment themes
We constantly seek out structural growth trends that will provide long-term
tailwinds throughout the economic cycle, 'Megatrends'. A selection of the
related investment themes are explained below.
Renewable energy generation
The demand for energy generated from renewable sources, such as wind and
solar, continues to rise as part of the global effort to increase power
generation and support the energy transition.
Our response
We have strategically invested in companies like Infinis, Future Biogas, and,
until its recent sale, Valorem, which collectively focus on generating energy
from a diverse range of renewable sources. During our ownership, the combined
installed capacity of these investments has grown significantly, reflecting
our commitment to advancing renewable energy solutions.
Electrification/energy transition
The transition towards a low-carbon economy is accelerating. This is driving
rising electricity consumption and the corresponding need for related
equipment and services.
Our response
Over the six years of our ownership, Joulz has significantly expanded its
offering, introducing solar energy solutions and electric vehicle ('EV')
charging products.
Shared resources
The increasing practice of a shared resources model offers significant cost
savings for users of capital-intensive assets and contributes to a reduction
in greenhouse gas emissions.
Our response
TCR provides pooled ground support equipment ('GSE') at airports. This
initiative has significantly reduced equipment requirements, improved
efficiency and lowered environmental impact.
Automation and digital operations
Rapid advancements in technology are transforming operating models and driving
the digitalisation of industrial processes. These innovations enhance
efficiency, streamline workflows, and improve overall performance across
industries.
Our response
Tampnet and FLAG are capitalising on the growing adoption of AI, automation,
cloud computing, and other digital technologies by their customers,
positioning themselves as key enablers in this evolving digital landscape.
Demand for healthcare
Rising life expectancy and an ageing population are driving increased demand
for healthcare services and infrastructure to meet evolving societal needs.
Our response
Our investment in Ionisos, a provider of cold sterilisation services for the
medical and pharmaceutical industries, aligns with this growing trend,
supporting critical healthcare supply chains and infrastructure.
Smart transportation
Technology is playing an increasingly vital role in improving the efficiency,
functionality, and safety of transportation.
Our response
SRL's innovative products enhance traffic flow management, particularly around
roadworks, reducing congestion and improving safety for both road users and
workers.
Urbanisation
The ongoing migration from rural areas to urban centres is increasing the
pressure on infrastructure in and around cities. This trend necessitates
upgrades to water, gas, electricity, transportation, and communication
networks to meet growing demand.
Our response
Joulz is addressing these challenges by providing integrated solutions,
including initiatives to mitigate grid congestion and support the efficient
functioning of urban infrastructure.
Our strategy
Our strategy is to maintain a balanced portfolio of infrastructure investments
delivering an attractive mix of income yield and capital appreciation for
shareholders.
Strategic priorities
Maintaining a balanced portfolio Delivering an attractive mix of income yield and capital growth for 17%
shareholders.
Largest single
Investing in a diversified portfolio in developed markets, with a focus on the
UK and Europe. investment by value
Disciplined approach to new investment Focusing selectively on investments that are value-enhancing to the Company's £22m
portfolio and with returns consistent with our objectives.
Follow-on investment
in the financial year net of syndication proceeds
Managing the portfolio intensively Driving value from our portfolio through our engaged asset management £392m
approach.
Total growth capital expenditure invested across the portfolio in 2024
Delivering growth through investment in platforms with growth potential.
£836m
Total available debt commitments raised at portfolio company level this
financial year
Maintaining an efficient balance sheet Minimising return dilution to shareholders from holding excessive cash, while £256m
retaining a good level of liquidity for future investment.
Net debt
£644m
Total liquidity
Sustainability a key driver of performance Ensuring that our investment decisions and asset management approach consider 4
both the sustainability risks and opportunities presented.
Companies with submitted or validated science-based targets
Our objectives and KPIs
Our objectives are to provide shareholders with: Our KPIs Rationale and definition Performance over the year
• Total return is how we measure the overall financial performance of • Total return of £333 million in the year, or 10.1% on opening NAV
the Company
• The portfolio showed good resilience overall with strong performance
• Total return comprises the investment return from the portfolio and in particular from TCR, Infinis, Oystercatcher, Future Biogas, and the return
income from any cash balances, net of management and performance fees and generated from the sale of Valorem
operating and finance costs. It also includes foreign exchange movement and
movement in the fair value of derivatives and taxes
• The performance of SRL and Ionisos detracted from the portfolio
return
• Total return, measured as a percentage, is calculated against the
opening NAV, net of the final dividend for the previous year, and adjusted (on
a time-weighted average basis) to take into account any equity issued and
capital returned in the year • The hedging programme continues to reduce the volatility in NAV from
exchange rate movements
• Costs were managed in line with expectations
Total return (% on opening NAV)
Target(1) 8% to 10%
2025 10.1%
2024 11.4%
a total return of 8% to 10% per annum, to be achieved over the medium term 2023 14.7%
2022 17.2%
2021 9.2%
Target
To provide shareholders with a total return of 8% to 10% per annum, to be
achieved over the medium term.
Met or exceeded target for 2025 and every prior year shown
a progressive annual dividend per share Annual distribution Rationale and definition Performance over the year
(pence per share)
• This measure reflects the dividends distributed to shareholders • Proposed total dividend of 12.65 pence per share, or £117 million,
each year is in line with the target set at the beginning of the year
• The Company's business model is to generate returns from portfolio • Income generated from the portfolio and cash deposits, including
income and capital returns (through value growth and realised capital non-income cash distributions and other income from portfolio companies,
profits). Income, other portfolio company cash distributions and realised totalled £376 million for the year
capital profits generated are used to meet the operating costs of the Company
and to make distributions to shareholders
• Operating costs and finance costs totalled £84 million in the year
• The dividend is measured on a pence per share basis, and is targeted
to be progressive
• Total income and non-income cash less operating and finance costs
totalled £292 million and therefore the dividend was fully covered for the
year with a surplus of £175 million
• Setting a total dividend target for FY26 of 13.45 pence per share,
6.3% higher than for FY25
2026 Target(1) 13.45p
2025 12.65p
2024 11.90p
2023 11.15p
2022 10.45p
2021 9.80p
Target
Progressive annual dividend per share policy. FY26 dividend target of 13.45
pence per share.
Dividend per share increased every year since IPO
Portfolio review
We have a focused portfolio of attractive infrastructure businesses in
structural growth markets. We are confident that it is well-positioned to
continue to deliver our target returns.
The Company's portfolio was valued at £3,790 million at 31 March 2025 (2024:
£3,842 million) and delivered a total portfolio return in the year of £432
million, including income and allocated foreign exchange hedging (2024: £460
million).
Table 1 summarises the valuations and movements in the portfolio, as well as
the return for each investment, for the year.
Table 1: Portfolio summary (31 March 2025, £m)
Portfolio
Directors' Directors' Allocated Underlying total
valuation Investment Accrued Foreign valuation foreign portfolio return
31 March in the Divestment income Value exchange 31 March exchange income in in the
Portfolio assets 2024 year in the year movement movement translation 2025 hedging(5) the year year(1)
TCR 608 16(2) (60)(4) 5 77 (7) 639 12 21 103
ESVAGT 531 51(2) - 1 (3) 4 584 (1) 52 52
Infinis 421 - (2)(4) - 61 - 480 - 18 79
FLAG 345 24(2) - 9 11 (7) 382 4 33 41
Tampnet 343 6(2) - 1 32 (3) 379 3 13 45
Joulz 306 9(2,3) (2)(4) - 27 (6) 334 8 7 36
Ionisos 306 17(2) - (8) (6) (6) 303 8 10 6
DNS:NET 164 34(2,3) - 2 (2) (3) 195 4 16 15
SRL 240 20(2) - 3 (70) - 193 - 23 (47)
Oystercatcher 248 - (108)(4) - 43 (4) 179 4 2 45
Future Biogas 100 35(2,3) (30)(4) 1 16 - 122 - 5 21
Valorem 230 1(2) (257) (2) 33 (5) - 5 3 36
Total portfolio reported in the Financial statements 3,842 213 (459) 12 219 (37) 3,790 47 203 432
1 This comprises the aggregate of value movement, foreign exchange translation,
allocated foreign exchange hedging and underlying portfolio income in the
year.
2 Capitalised interest totalling £161 million across the portfolio.
3 These amounts include follow-on investments in DNS:NET (£20 million), Future
Biogas (£30 million) and Joulz (£2 million).
4 Shareholder loan repayment (non-income cash), return of equity or syndication
proceeds.
5 Allocated foreign exchange hedging comprises fair value movements on
derivatives and foreign exchange on Euro borrowings.
The total portfolio return in the year of £432 million was 11.2% (2024: £460
million,12.3%) of the aggregate of the opening value of the portfolio and
follow-on investments (excluding capitalised interest), less amounts
syndicated in the year, which totalled £3,864 million.
Performance was good across the portfolio, driven by outperformance from a
number of portfolio companies, but particularly TCR, Infinis, Oystercatcher,
Future Biogas and the return generated from the sale of Valorem. This was
offset by weaker performance at SRL and Ionisos.
Table 2 shows the portfolio return in the year for each asset as a percentage
of the aggregate of the opening value of the asset and investments in, and
syndication of, the asset in the year (excluding capitalised interest). Note
that this measure is not time-weighted for investments and syndications in the
year and includes foreign exchange movements net of hedging.
Table 2: Portfolio return by asset (year to 31 March 2025)
Total portfolio return 11.2%
TCR 17.1%
ESVAGT 9.9%
Infinis 18.8%
FLAG 11.7%
Tampnet 13.4%
Joulz 11.7%
Ionisos 1.7%
DNS:NET 8.0%
SRL (19.6)%
Oystercatcher 18.5%
Future Biogas 21.3%
Valorem* 15.4%
* Divested in January 2025 and return not annualised.
Movements in portfolio value
The movements in portfolio value were driven principally by the delivery of
planned cash flows and other asset outperformance as well as follow-on
investments and syndications made during the year. A reconciliation of the
movement in portfolio value is shown in Table 3. The portfolio summary shown
in Table 1 details the analysis of these movements by asset. Changes to
portfolio valuations arise due to several factors, as shown in Table 4.
The portfolio generated a value gain of £219 million (2024: £259 million) in
the year, alongside income of £203 million (2024: £193 million).
Table 3: Reconciliation of the movement in portfolio value (year to 31 March
2025, £m)
Opening portfolio value at 1 April 2024 3,842
Investment(1) 213
Divestment/capital repaid (459)
Value movement 219
Exchange movement(2) (37)
Accrued income movement 12
Closing portfolio value at 31 March 2025 3,790
1 Includes capitalised interest.
2 Excludes movement in the foreign exchange hedging programme
Portfolio activity
TCR performed well in the year, driven by higher fleet utilisation rates and
accelerated expansion into new markets. The broader macro environment has been
supportive, with aviation activity now exceeding pre-pandemic levels. Higher
interest rates are favourable to ground support equipment ('GSE') lessors,
while growing decarbonisation efforts, particularly in Europe, have increased
demand for electric-powered GSE and also equipment pooling arrangements to
improve efficiency.
During the year, TCR secured several key contracts, including an exclusive
contract to supply a centralised all-electric GSE pool at JFK International
Airport New Terminal One. This marks a significant step forward in TCR's North
American presence and provides a strong platform for further growth in this
largely untapped market for the company.
In February 2025, we completed a debt refinancing on attractive terms,
supporting future growth and enabling a substantial distribution of £60
million to 3iN.
ESVAGT performed in line with expectations during the year.
ESVAGT is the market leader in European offshore wind Service Operation Vessel
('SOV') provision, currently operating nine vessels, with an additional four
SOVs under construction - three in Europe and one in the US. These vessels are
specifically designed to serve long-term charter agreements.
The European offshore wind development pipeline continues to see significant
growth, driven by increasing government targets for offshore wind and a
heightened focus on energy security. In contrast, the US market is facing
uncertainty due to a pause in new offshore wind projects. ESVAGT has also
established a joint venture with KMC Line in South Korea, which, if
successful, could see ESVAGT becoming the first international SOV operator in
the South Korean market, adding an alternative growth market to the business.
ESVAGT's Emergency Response and Rescue Vessel ('ERRV') segment performed
strongly, with high day rates and utilisation levels. The ERRV market remains
attractive, supported by stable demand and a shrinking supply of available
ERRVs to that market, due to vessel attrition and limited new tonnage entering
the market.
During the year, ESVAGT closed a further €200 million committed debt
facility at attractive rates, providing additional capital to support its
growth plans.
Infinis had a strong year, generating a value gain of £61 million, driven by
higher than forecast levels of exported power from its captured landfill
methane business.
Strategically, Infinis is ideally placed to scale its electricity generation
capabilities by developing solar and battery projects on brownfield and
landfill sites, which offer attractive fundamentals including expedited grid
connectivity. The company is making material progress on its 1.4GW pipeline of
solar and battery storage assets. During the year, Infinis commenced
construction on 150MW of solar capacity and secured planning consent for an
additional 134MW.
Despite ongoing industry-wide planning challenges, the company obtained
approvals for a further seven solar projects in the second half of the year.
Infinis maintains a confident outlook for its solar platform, supported by a
strong pipeline and favourable market tailwinds.
FLAG performed well during the year and generated a value gain of £11
million. This was driven by strong demand for subsea fibre capacity fuelled by
hyperscaler needs, AI-driven workloads and the expansion of global cloud
infrastructure. The sales pipeline for FLAG's capacity is robust and this has
contributed to achieving favourable premium pricing on the company's core
routes.
In December 2024, the company committed to a $34 million investment (funded
from the company's own resources) to secure new capacity on the
India-Asia-Xpress and India-Europe-Xpress cable systems. This investment
enhances FLAG's network in its core Europe-Middle East and Middle East-Asia
routes which are strategically important high-growth markets.
In April 2025, FLAG successfully completed a refinancing on improved terms to
support further expansion.
Tampnet outperformed expectations in the year, generating a value gain of £32
million. It exceeded both revenue and EBITDA targets, driven by increased
offshore activity, particularly in the Gulf of Mexico, and ongoing demand for
bandwidth upgrades.
Tampnet is experiencing growing demand for connectivity as AI and
digitalisation drive increased bandwidth requirements, alongside a heightened
focus on crew welfare solutions. The company has partnered with Armada to
deliver edge data centres and advanced AI-driven applications to its offshore
customers.
Tampnet's private networks business continues to grow, with 19 private
networks already installed. The company is encouraged by the strong momentum
in this segment and is actively working with several customers to design
technical connectivity solutions for carbon sequestration projects within its
existing network in the North Sea.
Joulz delivered a good performance during the year, supported by the
commissioning of new electrical infrastructure projects for customers.
The company operates in the Netherlands, where the shift towards a low-carbon
economy is driving strong demand for electrification and sustainable energy
solutions. Joulz provides tailored infrastructure to support businesses and
industrial users in meeting their decarbonisation objectives under medium-to
long-term energy-as-a-service contracts. Its integrated energy solutions
enable customers to operate and expand their businesses with reliable,
scalable and lower-emission energy.
During the year, Joulz completed a refinancing of its debt on favourable terms
providing additional capital to fund future growth projects.
The business is currently advancing several large projects for both individual
customers and whole business parks, which will help drive future growth.
Ionisos continues to experience growing demand across its core medical and
pharmaceutical segments. To maintain this momentum, the company continues to
advance its growth initiatives, including a capacity extension of its Kleve
Ethylene Oxide ('EO') facility in Germany and development of a new X-ray plant
in France. As part of its network optimisation, Ionisos is also preparing to
decommission two smaller EO sites.
At the same time, the business has strengthened its corporate functions to
support future growth. These initiatives, together with softer demand in the
non-core industrial cross-linking segment and the forthcoming site closures,
have weighed on returns for the period.
DNS:NET has made significant progress in the ongoing construction of its
fibre-to-the-home ('FTTH') network; both its owned networks in outer Berlin
and Brandenburg and its leased networks in Saxony-Anhalt. This is an important
achievement given the challenging market conditions for FTTH network rollouts
in Germany. It reflects the disciplined and focused approach to network
rollout adopted by DNS:NET.
In relation to its owned networks, the company has achieved its goal of
connecting its existing 'homes passed' and 'homes connected' infrastructure to
the backbone fibre infrastructure. This has led to a significant increase in
the number of 'homes connected and activated', with customers now receiving a
FTTH service and DNS:NET earning the associated revenues. DNS:NET is also
revisiting its existing networks to connect and activate additional homes (a
process referred to as 'densification') and is moving into new areas to
continue its rollout.
Significant operational improvements have been delivered under the new
management team including in relation to sales, marketing, and customer care.
In January 2025, 3iN injected a further £20 million of equity to part fund
the next stage of the fibre roll-out.
SRL specialises in providing equipment to support complex roadworks that
require a service component in addition to pure asset rental. The company
operates the largest depot network of intelligent traffic management systems
in the country, providing installation, monitoring, servicing, maintenance and
battery exchange services.
SRL performed significantly behind expectations during the year, caused by a
slowdown in activity from local authorities and the telecoms sector, combined
with competitive pressure impacting rental rates. Short-term market conditions
remain challenging, and we have taken action to cut costs to respond to this.
The reduction in value of this investment reflects the under performance in
the period and a more prudent view on its outlook.
Oystercatcher's 45% owned terminal Advario Singapore delivered a strong
performance for the year. Although the oil products market remained in
backwardation, demand for storage in Singapore and the broader region remained
strong and provided a favourable backdrop for Advario Singapore's commercial
discussions, which resulted in rate increases as contracts were renewed.
Advario Singapore has also seen an increase in customer activity, leading to
high blending and throughput volumes. Advario Singapore continues to be the
leading gasoline storage and blending facility in Singapore, as well as in the
wider region.
The company, which secured its first sustainable aviation fuel ('SAF') storage
and blending customer in 2023, is working with its customers to identify
opportunities to support them in their ambitions around renewable fuels.
In February 2025, Oystercatcher raised Singapore Dollar denominated holdco
debt. This funded a £96 million distribution from Oystercatcher to 3iN. This
was in addition to a further £12 million distribution from cash generated by
the company.
Future Biogas performed ahead of expectations, driven by higher average gas
prices and strong production volumes.
In August 2024, the company acquired a 51% stake in a portfolio of six
gas-to-grid AD plants from JLEN Environmental Assets Group Limited ('JLEN').
This investment has increased the operational scale of the company and was an
important milestone.
In September 2024, we syndicated a 23% stake in Future Biogas to RWE Energy
Transition Investments ('RWE') for proceeds of £30 million. RWE brings
extensive experience in the broader energy sector, and its investment endorses
the potential of the platform and the strategy we are pursuing.
In January 2025, the company completed construction of the Gonerby Moor site,
further expanding its operational scale. The site has a 15-year offtake
agreement with AstraZeneca for the green gas produced.
In March 2025, we completed a refinancing on favourable terms, increasing the
company's debt capacity to support future growth.
Summary of portfolio valuation methodology
Investment valuations are calculated at the half-year and at the financial
year end by the Investment Manager and then reviewed by the Board. Investments
are reported at the Directors' estimate of fair value at the relevant
reporting date.
The valuation principles used are based on International Private Equity and
Venture Capital ('IPEV') valuation guidelines, generally using a discounted
cash flow ('DCF') methodology (except where a market quote is available),
which the Investment Manager considers to be the most appropriate valuation
methodology for unquoted infrastructure equity investments.
Where the DCF methodology is used, the resulting valuation is checked against
other valuation benchmarks relevant to the particular investment, including,
for example:
• earnings multiples;
• recent transactions; and
• quoted market comparables.
In determining a DCF valuation, we consider and reflect changes to the two
principal inputs: forecast cash flows from the investment and discount rates.
We consider both the macroeconomic environment and investment-specific value
drivers when deriving a balanced base case of cash flows and selecting an
appropriate discount rate.
The inflation rate in the UK and Europe gradually declined during the year,
but remains above the long-term average, which has put pressure on supply
chain and employee costs.
Our inflation assumptions use market forecasts for 2025 and 2026, followed by
our long-term assumption of 2% CPI across all jurisdictions, or 2.5% for UK
RPI.
The portfolio is positively correlated to inflation, but the ability to pass
cost inflation to customers differs across portfolio companies. As a result,
we take an individualised approach to modelling the impact of inflation.
Longer-term power prices affect the valuation of our energy generating
portfolio companies. The majority of our power price exposure is hedged in the
short to medium term.
Future power price projections are taken from independent forecasters, and
changes in these assumptions will affect the future value of these
investments. Taxes on renewable electricity generators vary in their
applicability and we have considered their impact on each company
individually, based on their circumstances.
Table 4: Components of value movement (year to 31 March 2025, £m)
Value movement component Value movement in the year Description
Planned growth 218 Net value movement resulting from the passage of time, consistent with the
discount rate and cash flow assumptions at the beginning of the year less
distributions received and capitalised interest in the year.
Other asset performance 9 Net value movement arising from actual performance in the year and changes to
future cash flow projections, including financing assumptions and changes to
regulatory assumptions.
Discount rate movement - Value movement relating to changes in the discount rates applied to the
portfolio cash flows.
Macroeconomic assumptions (8) Value movement relating to changes to macroeconomic out-turn or assumptions,
e.g. power prices, inflation, interest rates and taxation rates. This includes
changes to regulatory returns that are directly linked to macroeconomic
variables.
Total value movement before exchange 219
Foreign exchange retranslation (37) Movement in value due to currency translation to year-end date.
Total value movement 182
Allocated foreign exchange hedging 47
Total value movement after hedging 229
As a 'through-the-cycle' investor with a strong balance sheet, we consider
valuations in the context of the longer-term value of the investments. This
includes consideration of climate change risk and stranded asset risk
Factors considered include physical risk, litigation risk linked to climate
change, and transition risk (for example, assumptions on the timing and extent
of decommissioning of North Sea oil fields, which affects Tampnet and ESVAGT).
We take a granular approach to these risks, for example, each relevant
offshore oil and gas field has been assessed individually to forecast the
market over the long term, and a low terminal value has been assumed at the
end of the forecast period.
In the case of stranded asset risk, we consider long-term threats that may
impact value materially over our investment horizon, for example,
technological evolution, climate change or societal change.
For ESVAGT, which operates ERRVs in the North Sea servicing sectors, including
the oil and gas market, we do not assume any new vessels or replacement
vessels in our valuation for that segment of the business.
A number of our portfolio companies are set to benefit from long-term
megatrends and, in the base case for each of our valuations, we take a
balanced view of potential factors that we estimate are as likely to result in
underperformance as outperformance.
Discount rate
Table 5 shows the movement in the portfolio's weighted average discount rate
over the past five years and the position as at 31 March 2025. The weighted
average discount rate remained unchanged over the course of FY25.
The range of discount rates used in individual valuations at 31 March 2025
spans from 10.3% at the lower end to 14.0% at the upper end. This is broadly
in line with the prior year's range (2024: 10.0% to 14.0%). Our discount rates
are consistent with our long-term assumptions for inflation and interest
rates; this is discussed in more detail in Note 7 to the Financial statements.
During the year, we witnessed a marginal increase in risk-free rates across
Europe primarily driven by fiscal policy developments and global macroeconomic
uncertainty. There has been a modest compression in risk premia but given the
significant risk premium included in our long-term discount rates and the
continued appetite for high-quality infrastructure businesses, this did not
impact the discount rates used to value our portfolio companies at 31 March
2025.
Table 5: Portfolio weighted average discount rate (31 March, %)
March 21 10.8
March 22 10.9
March 23 11.3
March 24 11.3
March 25 11.3
March 25 range 10.3 to 14.0
Portfolio company debt
Our portfolio companies are funded by long-term non-recourse senior-secured
debt alongside equity from the Company and other shareholders. There were no
mezzanine or junior debt structures within our portfolio at 31 March 2025
(2024: none).
In recent years, the Investment Manager has proactively refinanced facilities
across the portfolio, extending the term of the debt and securing low fixed
rates or hedged interest rates.
When considering the appropriate quantum of debt for a portfolio company, we
typically look for an investment grade level of risk. Some portfolio companies
have an investment grade credit rating from a credit rating agency. Table 6
below shows the percentage of debt maturing in each financial year across the
portfolio. The average loan-to-value ('LTV') ratio across the portfolio is 35%
(2024: 32%).
Table 6: Portfolio company leverage (% of debt maturing in each financial
year)
Financial year Debt maturing
FY26 0%
FY27 3%
FY28 9%
FY29 15%
FY30 43%
FY31 9%
FY32 12%
FY33 9%
Investment track record
As shown in Table 7, since its launch in 2007, 3i Infrastructure has built a
portfolio that has provided:
• significant income, supporting the delivery of a progressive annual
dividend;
• consistent capital growth; and
• strong capital profits from realisations.
These have contributed to an 18% annualised asset Internal Rate of Return
('IRR') since the Company's inception. The European portfolio has generated
strong returns, in line with, or in many cases ahead of, expectations.
These returns were underpinned by substantial cash generation in the form of
income or capital profits.
The value created through this robust investment performance has been
crystallised in a number of instances through well-managed realisations, shown
as 'Realised assets' in Table 7.
While the Company is structured to hold investments over the long term, it has
sold assets where compelling offers will generate additional shareholder
value.
Portfolio asset returns in Table 7 include an allocation of foreign exchange
hedging where applicable.
Table 7: Portfolio asset returns throughout holding period (since inception,
£m)
Value Proceeds on
including disposals/
Total accrued capital Cash Money
cost income returns income multiple
Current portfolio (£m)
TCR 304 639 64 62 2.5x
ESVAGT 329 584 - 9 1.8x
Infinis 352 480 92 140 2.0x
FLAG 318 382 - 19 1.3x
Tampnet 187 379 - 38 2.2x
Joulz 197 334 4 27 1.9x
Ionisos 191 303 - 13 1.7x
DNS:NET 259 195 - 8 0.8x
SRL 191 193 1 4 1.0x
Oystercatcher 139 179 155 176 3.7x
Future Biogas 93 122 - - 1.3x
Money
multiple IRR
Realised assets (Total return)
Valorem 3.6x 21%
Attero 2.7x 22%
WIG 1.7x 27%
XLT 5.9x 40%
Elenia 4.5x 31%
AWG 3.3x 16%
Eversholt 3.3x 41%
Projects 1.9x 22%
Others¹ 1.2x 8%
India Fund(2) 0.6x (6)%
Weighted average 2.6x
Portfolio asset returns include allocation of foreign exchange hedging where
applicable.
1 Others includes junior debt portfolio, T2C and Novera.
2 India Fund refers to the 3i India Infrastructure Fund.
Financial review
"We performed ahead of target and materially improved our liquidity position."
James Dawes
CFO, 3i Infrastructure
The Company grew its NAV and increased its dividend per share.
Key financial measures (year to 31 March) 2025 2024
Total return(1) £333m £347m
NAV £3,562m £3,342m
NAV per share 386.2p 362.3p
Total income(2) £204m £194m
Total income and non-income cash £376m £208m
Portfolio asset value £3,790m £3,842m
Net debt(3) £(256)m £(505)m
Total liquidity(4) £644m £395m
1 IFRS Total comprehensive income for the year.
2 Total income comprises Investment income and Interest receivable.
3 Net debt comprises cash balances of £4 million (2024: £5 million) less £260
million (2024: £510 million) drawn balance under the Company's £900 million
RCF.
4 Includes cash balances of £4 million (2024: £5 million) and £640 million
(2024: £390 million) undrawn balances available under the Company's £900
million RCF.
The Company delivered another year of outperformance, with the portfolio
generating robust capital growth. The proposed FY25 dividend of 12.65 pence
per share was fully covered. The target dividend for FY26 of 13.45 pence per
share is an increase of 6.3% over FY25.
The Company's strategy is to seek to deliver an attractive mix of income yield
and capital appreciation for shareholders, with a total return of 8% to 10% to
be achieved over the medium term.
In this Financial review we provide a more detailed analysis of our progress
across each of the key components that comprise our total return. The
Company's total return of £333 million is comprised of both capital return
and foreign exchange movements, alongside income and costs.
The Company's objective is to fully cover the dividend to shareholders through
income and non-income cash generated, net of costs. Further information on
dividend cover is available later in the Financial review.
Returns
Total return
The Company generated a total return for the year of £333 million,
representing a 10.1% return on opening NAV net of the prior year final
dividend (2024: £347 million,11.4%). This performance is ahead of the target
return of 8% to 10% per annum, to be achieved over the medium term.
There was strong performance across the portfolio, particularly from TCR,
Infinis, Oystercatcher and Future Biogas, and the excellent return generated
from the sale of Valorem, partially offset by underperformance from SRL and
Ionisos. Changes in the valuation of the Company's portfolio assets are
described in the Movements in portfolio value section of the Portfolio review.
Our portfolio companies continue to generate discretionary growth
opportunities that are accretive to our investment cases. Total net investment
in the year was £22 million, comprising further investment in DNS:NET and
Joulz.
An analysis of the elements of the total return for the year is shown in Table
8.
The Company maintained low levels of uninvested cash throughout the year and
actively managed its liquidity position through drawing on its £900 million
RCF. Amounts drawn under the RCF at 31 March 2025 were £260 million (2024:
£510 million)
Table 8: Summary total return (year to 31 March, £m)
2025 2024
Capital return (excluding exchange) 219 259
Foreign exchange movement in portfolio (37) (79)
Capital return (including exchange) 182 180
Movement in fair value of derivatives and exchange on EUR borrowings 47 87
Net capital return 229 267
Total income 204 194
Costs(1) (100) (114)
Total return 333 347
1 Includes non-portfolio related exchange gain of £2 million (2024: nil).
Table 9: Reconciliation of the movement in NAV (year to 31 March 2025, £m)
Opening NAV at 1 April 2024(1) 3,287
Capital return 219
Net foreign exchange movement(2) 10
Total income 204
Net costs including management fees (100)
NAV before distributions 3,620
Distribution to shareholders (58)
Closing NAV at 31 March 2025 3,562
1 Opening NAV of £3,342 million net of final dividend of £55 million for the
prior year.
2 Net foreign exchange movement comprises the gain on the fair value of
derivatives and exchange on EUR borrowings of £47 million less the loss on
the foreign exchange in the portfolio of £37 million.
Capital return
The capital return is the largest element of the total return. The portfolio
generated a value gain of £219 million in the year to 31 March 2025 (2024:
£259 million), as shown in Table 9. There was a positive contribution across
the majority of the portfolio with the largest increases from TCR (£77
million), Infinis (£61 million) and Oystercatcher (£43 million). There was a
negative contribution from SRL (£70 million). These value movements are
described in the Portfolio review section.
Sensitivities
The sensitivity of the portfolio to key inputs to our valuations is shown in
Table 10 and described in more detail in Note 7 to the financial statements.
The portfolio valuations are positively correlated to inflation. The
longer-term inflation assumptions beyond two years remain consistent with
central bank targets, e.g. UK and European CPI at 2%.
The sensitivities shown in Table 10 are indicative and are considered in
isolation, holding all other assumptions constant. Timing and quantum of price
increases will vary across the portfolio and the sensitivity may differ from
that modelled. Changing the inflation rate assumption may necessitate
consequential changes to other assumptions used in the valuation of each
asset.
Table 10: Portfolio sensitivities (year to 31 March 2025)
Sensitivity -1% -1% +1% +1%
Discount rate £391m 10.3% £(343)m (9.0)%
Inflation (for two years) £(48)m (1.3)% £47m 1.3%
Interest rate £190m 5.1% £(192)m (5.1)%
Foreign exchange impact
The portfolio is diversified by currency as shown in Table 11. We aim to
deliver steady NAV growth for shareholders, and the foreign exchange hedging
programme helps us to do this by reducing our exposure to fluctuations in the
foreign exchange markets.
Portfolio foreign exchange movements, after accounting for the hedging
programme, increased the net capital return by £10 million (2024: £8
million).
The reported foreign exchange loss on investments was £37 million (2024: loss
of £79 million). This was fully offset by a £47 million gain on the hedging
programme (2024: gain of £87 million). The positive hedge benefit resulted
from favourable interest rate differentials on the hedging programme.
Table 11: Portfolio value by currency (as at 31 March 2025)
EUR 39%
GBP 21%
DKK 15%
USD 10%
NOK 10%
SGD 5%
Income
The portfolio generated income of £203 million in the year (2024: £193
million). Of this amount, £7 million was through dividends (2024: £9
million) and £196 million through interest on shareholder loans (2024: £184
million). In addition, the Company earned £1 million of interest receivable
on deposits (2024: £1 million).
Total income and non-income cash is shown in Table 12.
Total income and non-income cash of £376 million in the year was higher than
last year, due to strong non-income cash from TCR and Oystercatcher (2024:
£208 million).
Table 12: Total income and non-income cash (year to 31 March, £m)
2025 2024
Total income 204 194
Non-income cash 172 14
Total 376 208
Non-income cash receipts reflect distributions from underlying portfolio
companies, which would usually be income to the Company, but which are
distributed as a repayment of investment for a variety of reasons. Whilst
non-income cash does not form part of the total return shown in Table 8, it is
included when considering dividend coverage.
Interest income from the portfolio was higher than prior year due to follow-on
investments in DNS:NET and Future Biogas. Dividend income was marginally below
the prior year due to the sale of Valorem.
A breakdown of income and non-income cash compared with the prior year is
provided in Table 13.
Table 13: Breakdown of portfolio income and non-income cash (year to 31 March,
£m)
2025 2024
Dividend 7 9
Interest 196 184
Non-income cash 172 14
Other interest 1 1
Costs
Management and performance fees
During the year to 31 March 2025, the Company incurred management fees of £49
million (2024: £49 million), including transaction fees of less than £1
million (2024: £1 million). The fees, payable to 3i plc, consist of a tiered
management fee, and a one-off transaction fee of 1.2% payable in respect of
new investments. The management fee tiers range from 1.4%, reducing to 1.2%
for any proportion of gross investment value above £2.25 billion.
An annual performance fee is also payable by the Company, amounting to 20% of
returns above a hurdle of 8% of the total return. This performance fee is
payable in three equal annual instalments, with the second and third
instalments only payable if certain future performance conditions are met.
This hurdle was exceeded for the year ended 31 March 2025, resulting in a
performance fee payable to 3i plc in respect of the year ended 31 March 2025
of £18 million (2024: £26 million).
The first instalment of £6 million will be paid in May 2025, along with the
second instalment of £9 million relating to the previous year's performance
fee, and the third instalment of £15 million relating to the FY23 performance
fee.
For a more detailed explanation of how management and performance fees are
calculated, please refer to Note 18 of the financial statements.
Other operating and finance costs
Operating expenses, comprising Directors' fees, service provider costs and
other professional fees, totalled £4 million in the year (2024: £4 million).
Finance costs of £31 million (2024: £35 million) in the year comprised
arrangement and commitment fees for the Company's £900 million RCF and
interest on drawings. Finance costs were lower than in FY24 due to lower
average monthly drawings and a decrease in interest rates.
Balance sheet
The NAV at 31 March 2025 was £3,562 million (2024: £3,342 million). The
principal components of the NAV are the portfolio assets, cash holdings, the
fair value of derivative financial instruments, borrowings under the RCF and
other net assets and liabilities. A summary balance sheet is shown in Table
14.
At 31 March 2025, the Company's net assets after the deduction of the proposed
final dividend were £3,504 million
(2024: £3,287 million).
Table 14: Summary balance sheet (as at 31 March, £m)
2025 2024
Portfolio assets 3,790 3,842
Cash balances 4 5
Derivative financial instruments 77 77
Borrowings (260) (510)
Other net liabilities (49) (72)
NAV 3,562 3,342
Cash and other assets
Cash balances at 31 March 2025 totalled £4 million (2024: £5 million).
Cash on deposit was actively managed by the Investment Manager and there are
regular reviews of counterparties and their limits. Cash is principally held
in AAA-rated money market funds.
Other net assets and liabilities predominantly comprise a performance fee
accrual of £50 million (2024: £74 million), including amounts relating to
prior year fees.
The movement from March 2024 is due to the accrual of the FY25 performance fee
of £18 million and £42 million of prior year performance fees were paid
during the year.
Borrowings
The Company has a £900 million RCF in order to maintain a good level and
maturity of liquidity for further investment whilst minimising returns
dilution from holding excessive cash balances. The RCF was refinanced in April
2025 and now matures in June 2028. At 31 March 2025, the total amount drawn
was £260 million (2024: £510 million).
During the year, the Company drew on the RCF in euros, which reduced the cost
of finance compared to borrowing in sterling and acted as a natural currency
hedge against our euro investments, reducing the size of the FX hedging
programme. Over the year, the average cost of RCF debt drawn was 4.9% (2024:
6.1%), considerably below the expected return from the portfolio indicated by
the weighted average discount rate of 11.3% at 31 March 2025 (2024:11.3%). The
current cost of drawings based on the latest Euribor and margin on the RCF at
7 May 2025 is 3.5%.
NAV per share
The total NAV per share at 31 March 2025 was 386.2 pence (2024: 362.3 pence).
This reduces to 379.9 pence (2024: 356.4 pence) after the payment of the final
dividend of 6.325 pence (2024: 5.95 pence). There are no dilutive securities
in issue.
Dividend and dividend cover
The Board has proposed a dividend for the year of 12.65 pence per share, or
£117 million in aggregate
(2024: 11.90 pence; £110 million). This is in line with the Company's target
announced in May last year.
When considering the coverage of the proposed dividend, the Board assesses the
income earned from the portfolio, interest received on cash balances and any
additional non-income cash distributions from portfolio assets which do not
follow from a disposal of the underlying assets, as well as the level of
ongoing operational costs incurred in the year. The Board also takes into
account any surpluses retained from previous years, and net capital profits
generated through asset realisations, which it considers available as dividend
reserves for distribution.
Table 15 shows the calculation of dividend coverage and dividend reserves. The
dividend was fully covered for the year with a surplus of £175 million (2024:
£10 million). This surplus was driven by the refinancings of TCR and
Oystercatcher which resulted in large non-income cash distributions to the
Company.
The retained amount available for distribution, following the payment of the
final dividend, the realised gain over cost relating to the sale of Valorem
and the performance fee, will be £1,215 million (2024: £880 million). This
is a substantial surplus, which is available to support the Company's
progressive dividend policy, particularly should dividends not be fully
covered by income in a future year.
Table 16 shows that the Company has consistently covered the dividend over the
last five years.
Table 15: Dividend cover (year to 31 March, £m)
2025 2024
Total income and non-income cash 376 208
Operating costs, including management fees (84) (88)
Dividends paid and proposed (117) (110)
Dividend surplus for the year 175 10
Dividend reserves brought forward from prior year 880 814
Realised gain over cost on disposed assets 178 82
Performance fees (18) (26)
Dividend reserves carried forward 1,215 880
Table 16: Dividend cover (five years to 31 March 2025, £m)
Net Dividend
income(1)
Mar 2021 87 87
Mar 2022 93 93
Mar 2023 136 101
Mar 2024 120 110
Mar 2025 292 117
1 Net income is Total income and non-income cash less operating costs.
Ongoing charges ratio
The ongoing charges ratio measures annual operating costs, as disclosed in
Table 17 against the average NAV over the reporting period.
The Company's ongoing charges ratio is calculated in accordance with the
Association of Investment Companies ('AIC') recommended methodology and was
1.53% for the year to 31 March 2025 (2024: 1.65%). The ongoing charges ratio
is higher in periods where new investment levels are high, the Company is
drawn into its RCF and new equity is raised or capital is returned to
shareholders. Realisation of assets reduces the ongoing charges ratio. The
cost items that contributed to the ongoing charges ratio are shown in Table
17.
The AIC methodology does not include transaction fees, performance fees or
finance costs. However, the AIC recommends that the impact of performance fees
on the ongoing charges ratio is noted, where performance fees are payable. The
ratio including the performance fee was 2.04% (2024: 2.44%). The total return
of 10.1% for the year, presented elsewhere in this report, is after deducting
this performance fee and ongoing charges.
Alternative Performance Measures ('APMs')
We assess our performance using a variety of measures that are not
specifically defined under IFRS and are therefore termed APMs. The APMs that
we use may not be directly comparable with those used by other companies.
These APMs provide additional information on how the Company has performed
over the year, and are all financial measures of historical performance.
The APMs are consistent with those disclosed in prior years but this year we
have added a new APM, Net debt.
• Total return on opening NAV reflects the performance of the capital
deployed by the Company during the year. This measure is not influenced by
movements in share price or ordinary dividends to shareholders. This is a
common APM used by investment companies
• The NAV per share is a measure of the underlying asset base
attributable to each ordinary share of the Company and is a useful comparator
to the share price. This is a common APM used by investment companies
• Total income and non-income cash is used to assess dividend coverage
based on distributions received and accrued from the investment portfolio
• Investment value including commitments measures the total value of
shareholders' capital deployed by the Company
• Total portfolio return percentage reflects the performance of the
portfolio assets during the year
• Net debt and Total liquidity are measures of the Company's ability
to make further investments and meet its short-term obligations
• Portfolio debt to enterprise value is a measure of underlying
indebtedness of the portfolio companies
Table 17: Ongoing charges (year to 31 March, £m)
2025 2024
Investment Manager's fee 49.3 49.3
Auditor's fee 0.8 0.8
Directors' fees and expenses 0.6 0.6
Other ongoing costs 2.1 2.3
Total ongoing charges 52.8 53.0
Ongoing charges ratio 1.53% 1.65%
The definition and reconciliation to IFRS of the APMs are shown below
APM Purpose Calculation Reconciliation to IFRS
Total return on opening NAV A measure of the overall financial performance of the Company. It is calculated as the total return of £333 million, as shown in the The calculation uses IFRS measures.
Statement of comprehensive income, as a percentage of the opening NAV of
£3,342 million net of the final dividend for the previous year of £55
million. There was no equity issued or capital returned during the year.
For further information see the KPI section.
NAV per share A measure of the NAV per share in the Company. It is calculated as the NAV divided by the total number of shares in issue at The calculation uses IFRS measures and is set out in Note 14 to the accounts.
the balance sheet date.
Total income and non-income cash A measure of the income and other cash receipts by the Company which support It is calculated as the total income from the underlying portfolio and other Total income uses the IFRS measures; Investment income and Interest
the payment of expenses and dividends. assets plus non-income cash, being the repayment of investment not resulting receivable. The non-income cash, being the proceeds from partial realisations
from the disposal of an underlying portfolio asset. This is used as one of the of investments, is shown in the Cash flow statement. The realisation proceeds
components for assessing the dividend coverage as discussed above. which result from a partial sale of an underlying portfolio asset are not
included within non-income cash.
Investment value including commitments A measure of the size of the investment portfolio including the value of It is calculated as the portfolio asset value plus the amount of the The portfolio asset value is the Investments at fair value through profit or
further contracted future investments committed by the Company. contracted commitment. At 31 March 2025, the Company had no investment loss reported under IFRS. The value of future commitments is set out in Note
commitments. 16 to the accounts.
Total portfolio return percentage A measure of the financial performance of the portfolio. It is calculated as the total portfolio return in the year of £432 million, The calculation uses capital return (including exchange), movement in fair
as shown in Table 1, as a percentage of the sum of the opening value of the value of derivatives, underlying portfolio income, opening portfolio value and
portfolio and follow-on investments (excluding capitalised interest), less investment in the year. The reconciliation of all these items to IFRS is shown
amounts syndicated in the year, of £3,864 million. in Table 1, including in the footnotes.
i) Net debt A measure of the Company's ability to make further investments and meet its i) Net debt is calculated as the cash balance of £4 million less the drawn The calculation uses the cash balance, which is an IFRS measure, and drawn and
short-term obligations. balance under the Company's RCF of £260 million. undrawn balances available under the Company's RCF as described in Note 11 to
ii) Total liquidity
the accounts.
ii) Total liquidity is calculated as the cash balance of £4 million plus the
undrawn balance available under the Company's RCF of £640 million.
Portfolio debt to enterprise value A measure of underlying indebtedness of the portfolio companies. It is calculated as total debt, as a percentage of the enterprise value of the The calculation is a portfolio company measure and therefore cannot be
portfolio companies, and does not include indebtedness of the Company. reconciled to the Company's accounts under IFRS.
Risk report
"Our consistent risk governance framework underpins our delivery of
long-term sustainable returns."
Martin Magee
Chair, Audit and Risk Committee
The Company has continued to deliver strong results despite the challenges
presented by the geopolitical and economic environment.
Inflation in the UK and Europe was markedly lower during the financial year
when compared with the previous year. This allowed central banks to commence
easing monetary policy, with the Bank of England base rate and European
Central Bank deposit rates ending the financial year at 4.5% and 2.5%
respectively. There remains considerable uncertainty over future monetary
easing and indeed whether inflationary pressures could start to build again.
A reduction in liquidity in the listed infrastructure sector, as allocations
moved to fixed income alternatives when interest rates increased in the
previous two years, resulted in shares trading at discounts to NAV across the
whole sector. The Company has generally traded at one of the lowest discounts
to NAV in the sector throughout the year.
One of the joint Managing Partners of the Investment Manager's European
Infrastructure team left during the year, with the other Managing Partner
assuming sole leadership of the business, which provided continuity in the
management of the Company.
The realisation of Valorem and distributions from portfolio companies, in
particular from Oystercatcher and TCR, resulted in a material reduction in net
debt, from £505 million to £256 million during the year.
Against this backdrop, the Audit and Risk Committee (the 'Committee') has
worked closely with the Investment Manager to understand the effect of these
changes on the identified key risks.
Actual and potential changes in the macroeconomic environment were discussed
at each meeting, with the recent announcements regarding international trade
and tariffs analysed and considered at the latest meeting of the Committee at
the end of April 2025.
The Committee noted that the portfolio companies typically do not trade goods
across international borders so are less likely to be directly affected, and
that the longer-term indirect effects remain uncertain.
The Company's liquidity position was monitored throughout the year, with the
position improving through the realisation and distributions mentioned above
as well as the recent successful refinancing of the Company's RCF.
The Board and the Committee meet regularly with senior members of the
Investment Manager's team, which gave confidence in the continuity of
leadership following the departure of one of the Managing Partners.
Regular insight has also been provided to the Board and the Committee by the
Company's brokers and other advisers in relation to the market for the
Company's shares. This insight was supplemented during the year by an investor
perception study, conducted by Rothschild & Co. This was the third such
study conducted by the same team, allowing for evolving perceptions to be
tracked over time.
The Committee oversees a comprehensive risk management framework that
systematically identifies and evaluates the principal, key, and emerging risks
impacting the Company.
This framework provides a well-informed basis for the Board's decisions
regarding performance, liquidity, capital structure, and the overall business
model. Despite the challenges presented by the geopolitical and economic
environment, the Company has delivered strong results, driven by dynamic and
adaptive decision-making enabled by our risk management process. We remain
confident that the consistent application of this robust framework is integral
to maintaining the Company's strong track record.
At the beginning of the year, the Committee, alongside the Investment Manager,
began a new three-year cycle of risk reviews to identify and consider the
impact and likelihood of the principal, key, and emerging risks facing the
Company today.
A number of risks were reassessed to reflect developments in the year, and the
list of emerging risks was refreshed. The Committee updated the risk register
and risk matrix as a result of the analysis conducted during the year, and
considered the alignment of the principal risks identified to the Company's
strategic objectives. This process is described in more detail in the Risk
review process section.
The following sections explain how we identify and manage risks to the
Company. We outline the principal risks, our assessment of their potential
impact on the Company and our portfolio in the context of the current
environment and how we seek to mitigate them.
Risk framework
Risk-related reporting
Internal External
• Monthly management accounts • Risk appetite
• Internal and external audit reports • Viability statement
• Service provider control reports • Resilience statement
• Risk logs • Internal controls
• Compliance reports • Going concern
• Risk-related reporting • Statutory/accounting disclosures
Risk governance approach
The Board is responsible for risk assessment and the risk management process.
It aims to strike a suitable balance between risk mitigation and generating
long-term risk-adjusted returns for shareholders. Our approach to risk
management is underpinned by our Board values of Integrity, Objectivity,
Accountability and Legacy.
The Committee oversees the risk framework, methodology and process. This risk
framework ensures a structured and consistent approach to identifying,
assessing and addressing risks. Consistency in risk management across the
Company's strategy, business objectives, policies and procedures is a key
objective of the Committee.
The Committee considers the most significant current and emerging risks facing
the Company using a range of quantitative data and analyses where possible.
These include: vintage controls which consider the portfolio concentration by
geography and sector; periodic reporting of financial and non-financial KPIs
from the portfolio, including leverage levels and ESG indicators; and
liquidity reporting. Longer-term and new and emerging risks are evaluated as
part of the risk review process.
This year, a dashboard of key risk indicators (KRIs) was incorporated into the
regular monthly financial reporting, alongside qualitative information, to
enhance the Committee's ability, on behalf of the Board, to monitor the
Company's risk profile.
The Company is also reliant on the risk management frameworks of the
Investment Manager and other key service providers, as well as on the risk
management practices of each portfolio company.
Risk management reports are received from the Investment Manager and other
service providers.
The Investment Manager's team members represent the Company on all portfolio
companies' boards which informs the risk-related reporting.
Risk appetite
The Committee reviews the Company's risk appetite annually, and this year
confirmed that it remained broadly stable. As an investment company, the
Company seeks to take investment risk. Our appetite for investment risk is
detailed in the Our business model section and the Investment policy set out
in this document. All investments adhere to the Investment Manager's
Responsible Investment policy, a critical component of our risk approach. In a
competitive market for new investments, maintaining investment discipline
remains paramount.
That investment discipline is equally important when considering realisations,
such as that of Valorem during the year. Our investment procedures are
rigorous and comprehensive.
The target risk-adjusted objective of delivering 8% to 10% return per annum
over the medium term remains consistent with our current portfolio investment
cases.
Should our portfolio expand, the range of expected returns in individual
investment cases may widen.
This expansion could include both higher risk/return 'value add' cases and
lower risk/return 'core' investments. We acknowledge that this may introduce
greater volatility in returns on an individual asset basis.
However, diversification across sectors, countries and underlying economic
risks mitigates this volatility. Reflecting the Company's current liquidity
position, the current focus remains on investing through the existing
portfolio, which we believe should generate better risk-adjusted returns than
adding new platform investments, and on repayment of drawings on the Company's
RCF. Considerable progress in repaying drawings was made during the year,
following the realisation of Valorem and distributions from portfolio
companies.
We have intentionally built a diverse portfolio while carefully assessing the
risks faced by our portfolio companies. The Committee reaffirmed that the
Company's risk appetite for core-plus infrastructure investments remains
unchanged, and aligns with our investment mandate and target returns. The
recent macroeconomic uncertainty has tested the appropriateness of our
business model and risk appetite, and overall, our portfolio has demonstrated
resilience, benefitting from diversification across infrastructure subsectors
and underlying risk types.
The Company adopts a conservative approach to managing its capital resources.
It has no appetite for permanent gearing and the achievement of its returns
objectives is not reliant on gearing. The Company operates a flexible funding
model and has been a relatively infrequent issuer of new shares in the
infrastructure investment trust market.
The Company's shares have traded at a discount to published net asset value
throughout the year. This has restricted access to new equity issuance and
increased the importance of the RCF to bridge the cycle between investment and
realisation,
as well as cash generation by underlying portfolio companies. The RCF was
refinanced in April 2025, well ahead of
the maturity of the previous facility in November 2026 and now matures in June
2028.
The Company aims to reduce the impact of currency movements on its net asset
value through a combination of euro borrowing on its RCF and a foreign
exchange hedging programme.
Risk review process
The key tools used by the Committee to assess the appetite for key risks are
the risk register and the risk matrix.
The process of creating and reviewing the risk register and risk matrix is
described below, together with a discussion of the Company's appetite for each
of the key risks.
In addition to investment risk, which is discussed above, the Company actively
manages and limits exposure to other risks to maintain acceptable levels.
The Company's risk review process includes the monitoring of key strategic and
financial metrics considered to be indicators of potential changes in its risk
profile.
The review takes place three times a year, with the last review in April 2025
and includes, but is not limited to, the following:
• infrastructure and broader market overviews;
• key macroeconomic indicators and their impact on the performance and
valuation of portfolio companies;
• regular updates on the operational and financial performance of
portfolio companies;
• experience of investment and divestment processes;
• compliance with regulatory obligations, including climate-related
regulations;
• analysis of new and emerging regulatory initiatives;
• liquidity management;
• assessment of climate risks to the portfolio, including physical,
transition and litigation risks;
• consideration of scenarios that may impact the viability of the
Company;
• assessment of emerging risks; and
• review of the Company's risk log of relevant incidents or issues
during the year.
The Committee uses the risk framework to identify both emerging and key risks,
assessing changes in risks over time. This framework is designed to manage,
rather than eliminate, the risk of failing to achieve objectives or breaching
our risk appetite.
Throughout the year, we closely monitor significant key risks or principal
risks, which have the potential to materially impact the achievement of our
strategic objectives.
The Committee evaluates the likelihood of each identified risk materialising
and the potential impact it may have, with reference to the Company's strategy
and business model. We assess risks over two timeframes: within three years;
and beyond three years. The results are presented on a risk matrix.
For each risk, we develop mitigating controls and assess their adequacy. If
necessary, additional controls are implemented and reviewed during subsequent
Committee meetings.
The Committee considers the identified principal risks in greater detail in
the assessment of the Company's viability. This assessment considers a number
of plausible scenarios that could arise if these risks materialise, including
stressed scenarios that might jeopardise the Company's viability. As the
Company is an investment company, the stressed scenarios primarily focus on
reduced cash flows from our investment portfolio. These scenarios could lead
to debt covenant breaches and liabilities not met.
The Investment Manager models the impact of these scenarios on the Company and
reports the results to the Committee. The resulting viability assessment is
included in this Risk report.
Risk categorisation
The Committee uses the following categorisation to describe risks that are
identified during the risk review process.
Emerging risks Key risks Principal risks
An emerging risk is one that may in future be likely to have a material impact A key risk is considered currently to pose the risk of a material impact on The Committee maintains a risk matrix, onto which all the key risks on the
on the performance of the Company and the achievement of our long-term the Company. These are documented in a risk register. Risks may be identified risk register are mapped by impact and likelihood. The principal risks are
objectives, but that is not yet considered to be a key risk and is subject to as emerging risks and subsequently become key risks. Identified key risks may identified on the risk matrix as those with the highest combination of impact
uncertainty as to nature, impact and timing. cease to be considered key risks over time. and likelihood scores. These are disclosed in the Principal risk and
mitigations table below.
Review during the year
In October 2024, the Committee began the latest three-year cycle of reviews
with a process designed to identify and score the key risks and update the
list of emerging risks currently facing the Company. This started with the
'blank sheet of paper' exercise where each Director, and several members of
the Investment Manager's team, identified the top risks facing the Company.
In December 2024, the Investment Manager analysed the collected data and
documented both emerging and key risks.
The key risks were scored for impact and likelihood over a three-year period,
building upon the scoring of those risks in the prior year's assessment. Those
key risks with the highest combination of impact and likelihood were
identified as principal risks.
In January 2025, the Committee assessed the results of the risk scoring and
made additional adjustments. They also considered the same key risks for a
beyond three-year period and discussed the Company's risk appetite.
In April 2025, the Committee reviewed the updated risk register and risk
matrix for both a three-year and beyond three-year period, alongside analysis
of the portfolio exposure to increased trade tariffs.
We have a relatively diverse spread of assets in the portfolio and it is
important that risk diversity is maintained as we evolve the portfolio through
new investments, realisations and syndications.
Future realisations and syndications will continue to shape the portfolio's
risk profile in line with our strategy. This flexibility allows us to manage
exposure to more sensitive assets and adapt to changes in risk profiles over
time.
We remain confident that the portfolio remains defensive and resilient, and it
is well-positioned to benefit from accretive but discretionary growth
opportunities, as highlighted in the Review from the Managing Partner. Our
assessment indicates that the current risk appetite is appropriate.
Risk register review process
October 2024
Directors identify potential emerging or new key risks facing the Company
December 2024
Analysis and interpretation of responses
January 2025
Impact and likelihood of the identified risks considered
April 2025
Risk register and risk matrix updated
Emerging risks
As a long-term investor, the Company must carefully assess both identified key
risks, as detailed below, and emerging or longer-term risks. Risk
categorisation, including the definition of emerging risks, is outlined above.
The Board and the Investment Manager take these factors into account when
evaluating portfolio performance and assessing new investments. Their goal is
to identify potential risks that can either be mitigated or transformed into
opportunities. These risks are identified through a variety of activities such
as conversations with stakeholders, presentations given to the Board,
attending industry events and horizon scanning performed by the Investment
Manager.
As part of our ongoing risk management, the Committee evaluates whether
emerging risks should be added to the Company's
risk register.
This register is a 'live' document, regularly reviewed and updated by the
Committee as new risks emerge and existing risks evolve. Examples of emerging
risks considered during the year include opportunities and challenges related
to AI tools, geopolitical tensions, change in renewables/energy policies from
governments, emerging energy technologies, including nuclear fusion and supply
chain risk from new protectionist policies and tariffs. In some instances,
emerging risks may already be encompassed within broader identified key risks,
such as market and economic risk.
Key risks
The Committee assesses key risks by evaluating their impact and likelihood on
a risk matrix.
Throughout the year, the Committee examined all the key risks in detail.
Within the category of key risks, the principal risks identified by the
Committee are outlined in the Principal risks and mitigations table. The
disclosures in the Risk report do not encompass an exhaustive list of risks
and uncertainties faced by the Company. Instead, they serve as a concise
summary of significant key risks actively reviewed by the Board, their
mitigating controls and developments in the year.
Whilst the risk landscape evolved over the course of the year, the inherent
principal risk areas that the business faces remain largely consistent with
the previous year and are set out in the Principal risks and mitigations
table, together with further information on developments in the year and
examples of material controls and processes designed to mitigate these risks.
The assessment of likelihood and impact led to minor adjustments in the
principal risks facing the Company, as compared with the prior financial year.
A new principal risk has been included to reflect the risk that the discount
of the share price to net asset value continues for a longer period of time,
reflecting the decline in the public valuation of listed companies in the
infrastructure sector, which has limited access to the equity capital market.
The risk that debt markets deteriorate has been removed as a principal risk
reflecting the stability of funding markets, falling interest rates across
Europe and the experience of the Company in refinancing processes during the
year.
Market and economic risk was considered the top risk facing the Company and
was assessed to have remained stable during the year. This risk encompasses
consequences such as high inflation and interest rates, elevated or volatile
commodity and energy prices, supply chain constraints, the impact of trade
tariffs and volatile capital markets affecting pricing, valuations and
portfolio performance.
The risks related to competition and liquidity management were deemed to have
decreased over the year. This follows the successful divestment of Valorem and
distributions from portfolio companies, in particular Oystercatcher and TCR,
all of which have significantly reduced the Company's net debt.
There were no significant changes in the remaining principal risks.
Fraud and cyber risk
We remain vigilant to cyber- and other IT-related threats that could disrupt
the Company, compromise data, or harm our reputation. The Investment Manager
has a robust fraud risk assessment and anti-fraud programme in place. This
programme includes proactive fraud prevention work by their Internal Audit
team, mandatory training to enhance vigilance and awareness, and an
independent reporting service (accessible to all staff) known as the
'hotline'.
Additionally, the Investment Manager's cyber security programme focuses on
identifying and mitigating risks related to third-party frauds, such as
ransomware and phishing attacks. Regular staff training and the use of IT
security tools contribute to this effort.
Furthermore, we have a detailed business continuity and disaster recovery plan
in place to address significant events.
We also actively request our service providers to inform us promptly of any
significant cyber events that they experience.
Climate risk
Climate risk considers both physical risks (direct impacts of climate change
such as flooding events) and transition risks (changes arising from the
transition to a low-carbon economy, including regulatory and financial
changes) over different time horizons.
Failing to identify and mitigate these risks could lead to reduced asset
attractiveness, reputational harm, and a decline in portfolio value over time.
While uncertainties persist regarding the precise impact and timing of climate
change, government actions, and future regulations, we recognise that
climate-related risk is not only a key risk but also an essential investment
theme for the Company.
Climate regulation risk, which the Committee now assesses within the legal,
tax and compliance risk, addresses the regulatory risk linked to the
transition toward a low-carbon economy. It encompasses the impact of evolving
regulations on the Company and the portfolio.
The proposed amendments introduced by the European Commission's Omnibus
simplification package to legislation such as the Corporate Sustainability
Reporting Directive ('CSRD') and the Corporate Sustainability Due Diligence
Directive ('CSDDD') may reduce the anticipated burden from these reporting
regimes on our portfolio.
As highlighted in the Sustainability section, of the Annual Report and
Accounts, the climate-related risks - both physical and transition - are also
viewed as opportunities across our portfolio.
There are no immediate acute physical or transition risks identified in the
portfolio that would categorise climate risk as a principal risk. An example
of transition risk is the risk of early decommissioning of oil and gas assets,
which impacts certain customers of Tampnet and ESVAGT. A related transition
opportunity is the potential for prolonged life of offshore platforms to
facilitate sequestration of carbon dioxide in old oil or gas fields, which
could benefit Tampnet and ESVAGT. Drought and flood risk impacts feedstock
supply and quality which would impact Future Biogas. Although difficult to
quantify, a prudent assumption for feedstock losses has been made alongside
contingency for construction activities to address flood risk.
Principle risks and mitigations
External
Principal risk Risk description Risk mitigation Developments in the year
Market/economic • Macroeconomic or market volatility impacts general market confidence • Resources and experience of the Investment Manager on deal-making, • Strong portfolio performance, demonstrating resilience, leading to
and risk appetite which flows through to pricing, valuations and portfolio asset management and hedging solutions to market volatility an increase in portfolio value in the year
performance
• Periodic legal and regulatory updates on the Company's markets and • Foreign exchange exposures at the portfolio company level monitored
• Fiscal tightening impacts market environment in-depth market and sector research from the Investment Manager and other and hedged where appropriate
advisers
Risk exposure movement in the year • Risk of sovereign default lowers market sentiment and increases
• The Company's share price traded below NAV during the year and this
volatility • Portfolio diversification to mitigate the impact of a downturn in restricted the Company's ability to raise new capital
No significant change
any geography, sector or portfolio company-specific effects
• Misjudgement of inflation and/or interest rate outlook
• Private equity market valuations typically less affected than public
• The permanent capital nature of an investment trust allows us to equity market valuations during periods of significant public market
look through market volatility and the economic cycle volatility
Link to Strategic priorities
Manage portfolio intensively
Competition • Increased competition for the acquisition of assets in the Company's • Continual review of market data and review of Company return target • Realisation of Valorem at a 31% premium to the September 2023
strategic focus areas compared to market returns valuation, before the Valorem sale process was initiated
• Deal processes become more competitive and prices increase • Ongoing analysis of the competitor landscape • No new platform investments added to the portfolio during the year,
with net investment of £22 million in the existing portfolio
• New entrants compete with a lower cost of capital • Origination experience and disciplined approach of the Investment
Risk exposure movement in the year Manager
No significant change • Strong track record and strength of the 3i Infrastructure brand
Link to Strategic priorities
Disciplined approach
Continuing discount to NAV • The Company's share price continues to trade at a discount to NAV • Regular review of the level of discount or premium relative to the • Validation of NAV through sale of Valorem at a 31% premium to
listed infrastructure sector pre-transaction valuation, and syndication of a stake in Future Biogas to RWE
• This restricts the ability to raise new equity which reduces the
at a 15% premium to pre-transaction valuation
ability to support the portfolio or take advantage of new investment • Clear communication to investors on strategy, performance and
opportunities and can cause shareholder dissatisfaction outlook • Ongoing withdrawal of liquidity from listed infrastructure sector
puts pressure on share prices
Risk exposure movement in the year • Regular engagement with shareholders and consideration of
shareholder feedback • Discount is smaller than listed infrastructure comparables
New principal risk
• Deliver strong returns to build investor confidence
• Consider ways to enhance share price performance through
Link to Strategic priorities effectiveness of marketing or policies such as share buybacks
Maintain balanced portfolio • The Company's brokers are in regular contact with existing
shareholders and prospective new investors
Efficient balance sheet
Operational
Principal risk Risk description Risk mitigation Developments in the year
Loss of senior Investment Manager staff • Members of the deal team at the Investment Manager leave, and • Strength and depth of the senior team and strength of the 3i Group • The Investment Manager's team has strength and depth
'deal-doing' and portfolio management capability in the short to medium term brand
is restricted
• Careful management of change in senior management, moving from
• Performance-linked compensation packages, including an element of Bernardo Sottomayor and Scott Moseley as joint Managing Partners to Bernardo
Risk exposure movement in the year deferred remuneration Sottomayor as sole Managing Partner, providing continuity of leadership
No significant • Notice periods within employment contracts
change • Careful management and robust planning of senior management
transition
Link to Strategic priorities
Maintain balanced portfolio
Sustainability key driver
Management of liquidity • Failure to manage the Company's liquidity, including cash and • Regular reporting of current and projected liquidity • The Company has access to a £900 million RCF that was refinanced in
available credit facilities
April 2025 and now matures in June 2028. Total liquidity of £644 million
• Investment and planning processes consider sources of liquidity comprised cash and deposits of £4 million and undrawn facilities of £640
• Insufficient liquidity to pay dividends and operating expenses or to
million at 31 March 2025, a substantial increase of £249 million during the
Risk exposure movement in the year make new investments or support portfolio companies • Flexible funding model, where liquidity can be sought from available financial year
cash balances including reinvestment of proceeds from realisations, committed
Decreased • Hold excessive cash balances, introducing cash drag on the Company's credit facilities which can be increased with approval from our lenders, and • No outstanding commitments at 31 March 2025
returns the issue of new share capital
• Access to the equity capital markets was limited as a result of
• Growth opportunities can be part or fully funded by portfolio share price declines in the listed infrastructure investment trust sector and
Link to Strategic priorities company cash balances and/or available debt facilities this restricted the Company's ability to raise new capital
Disciplined approach
Efficient balance sheet
Deliverability of return target • Failure to ensure the investment strategy can deliver the return • Market returns are reviewed regularly • Total return for the year of 10.1% outperforming target return of
target and dividend policy of the Company
8-10% per annum
• The Investment Manager and other advisers to the Company report on
• Failure to adapt the strategy of the Company to changing market market positioning • FY25 dividend of 12.65 pence per share, 6.3% higher than the
Risk exposure movement in the year conditions
previous year
• Investment process addresses expected return on new investments and
No significant the impact on the portfolio
change • Consideration of megatrends in the investment process
• Consideration of risks, including ESG and climate risks, in the
investment process
Link to Strategic priorities
Maintain balanced portfolio
Sustainability key driver
Investment
Principal risk Risk description Risk mitigation Developments in the year
Security of assets • An incident, such as a cyber or terrorist attack • Regular review of the Company and key service providers • Ongoing focus on IT security and staff training including
utilisation of specialist advisers by the key service providers
• Unauthorised access, use, disclosure, modification or destruction of • Regular review and update of cyber due diligence for potential
information and/or operating systems investments • Continued programme of phishing and penetration testing and review
Risk exposure movement in the year
of disaster recovery plans in the year
• Regulatory and legal risks from failure to comply with cyber-related • Review of portfolio companies for cyber risk management and incident
No significant change laws and regulations, including data protection readiness • Portfolio company boards continued to focus on cyber risk
management. While some portfolio companies encounter fraud attempts (with
• Established governance and reporting processes, including incident occasional success), none have materially impacted our companies
escalations and breach reporting
Link to Strategic priorities
Maintain balanced portfolio
Sustainability key driver
Poor investment performance • Misjudgement of the risk and return attributes of a new investment • Robust investment process with thorough challenge of the investment • Resilient performance from the portfolio overall
case supported by detailed due diligence
• Material issues at a portfolio company
• Increase in portfolio valuation, and the realisation of Valorem and
• Investment Manager's active asset management approach, including syndication of a stake in Future Biogas at a premium to last valuation
Risk exposure movement in the year • Poor judgement in the realisation of an asset proactive management of issues arising at portfolio company level
• Active asset management including implementing changes in the
No significant • Monthly portfolio monitoring to identify and address portfolio leadership team and the reassessment of strategy at portfolio companies as and
issues promptly when appropriate
change
• Experience of the Investment Manager's team in preparing for and • Progress by portfolio companies along their sustainability pathways
executing realisations of investments
Link to Strategic priorities
Maintain balanced portfolio
Sustainability key driver
Resilience
Our resilience comes from the effective implementation of our business model,
described above. Key elements of our business model relating to resilience
include the Investment Manager's disciplined approach to new investment and
active asset management, the defensive characteristics of our portfolio of
investments, high ESG standards, our flexible funding model and efficient
balance sheet, and the capability of the Investment Manager's team.
This is underpinned by the strong institutional culture and values of our
Investment Manager, high standards of corporate governance, and effective risk
management.
Over the life of the Company, the Investment Manager has built a resilient and
diversified portfolio with good growth potential and downside protection that
delivers an attractive mix of income yield and capital appreciation for
shareholders. This has been achieved through consistent delivery of our
strategic priorities, described above.
Short-term resilience
The Directors assess the Company's short-term resilience through monitoring
portfolio, pipeline and finance reports. These are prepared monthly, and
discussed at quarterly scheduled Board meetings and Board update calls held
between scheduled meetings. Six-monthly detailed investment reviews are
prepared by the Investment Manager and discussed with the Board, as part of
the half-yearly and annual valuation and reporting processes. These reviews
describe sources of risk at portfolio company level, and mitigating actions
being taken or considered.
The resilience of key suppliers, including the Investment Manager, is
considered annually, or more frequently if appropriate. The Audit and Risk
Committee is provided with relevant extracts of reports from the Investment
Manager's internal audit team, which includes an annual report on the
Investment Manager's European infrastructure investment team. Further detail
is included in the Governance section of the Annual report and accounts 2025.
The Directors manage the Company's liquidity actively, reviewing reports on
current and forecast liquidity from the Investment Manager, alongside
recommendations for seeking additional liquidity when appropriate. In April
2025, the RCF was refinanced on improved terms and now matures in June 2028.
Further discussion on the RCF can be found in the Financial review.
The identification of material uncertainties that could cast significant doubt
over the ability of the Company to continue as a going concern forms the basis
of the Going concern statement below.
Going concern
The Company's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Strategic
report and in the Financial statements and related Notes to the Annual report
and accounts to 31 March 2025. The financial position of the Company, its
cash flows, liquidity position and borrowing facilities are also described in
the Financial statements and related Notes to the Annual report and accounts
2025.
In addition, Note 9 to the accounts includes the Company's objectives,
policies and processes for managing its capital, its financial risk
management objectives, details of its financial instruments and hedging
activities, and its exposures to credit risk and liquidity risk.
The Directors have made an assessment of going concern, taking into account
the Company's cash and liquidity position, current performance and outlook,
which considered the impact of the current inflationary and interest rate
environment, using the information available up to the date of issue of these
Financial statements.
The Company has liquid financial resources and a strong investment portfolio,
providing a predictable income yield and an expectation of medium-term capital
growth.
The Company manages and monitors liquidity regularly, ensuring that it is
sufficient.
At 31 March 2025, liquidity remained strong at £644 million (2024: £395
million). Liquidity comprised cash and deposits of £4 million (2024: £5
million) and undrawn facilities of £640 million (2024: £390 million). The
£900 million RCF matures in June 2028, beyond 12 months of the date of this
report.
The Company had no contracted investment commitments at 31 March 2025.
However, the Company expects to make follow-on investments in portfolio
companies to fund growth opportunities.
The Company had ongoing charges of £53 million in the year to 31 March 2025,
detailed in Table 17 in the Financial review, which are indicative of the
ongoing run rate in the short term. In addition, the FY25 performance fee of
£18 million (2024: £26 million) is due in three equal instalments, with the
first instalment payable in the next 12 months along with the second
instalment of FY24's performance fee and the third instalment of FY23's
performance fee, and a proposed final dividend for FY25 of £58 million which
is expected to be paid in July 2025.
Although not a commitment, the Company has announced a dividend target for
FY26 of 13.45 pence per share. Income and non-income cash is expected to be
received from the portfolio investments during the coming year, some of which
will be required to support the payment of this dividend target and the
Company's other financial commitments.
The Directors have acknowledged their responsibilities in relation to the
Financial statements for the year to 31 March 2025. After making the
assessment on going concern, the Directors considered it appropriate to
prepare the Financial statements of the Company on a going concern basis.
The Company has sufficient financial resources and liquidity and is
well-positioned to manage business risks in the current economic environment
and can continue operations for a period of at least 12 months from the date
of this report. This is supported by the scenario analysis and stress testing
described in the medium-term resilience section and the Viability statement.
Accordingly, the Directors continue to adopt the going concern basis in
preparing the Annual report and accounts.
Medium-term resilience
The assessment of medium-term resilience, which includes modelling of stressed
scenarios and a reverse stress test, considers the viability and performance
of the Company in the event of specific stressed scenarios, which are assumed
to occur over a three-year horizon. This stress testing forms the basis of the
Viability statement.
The Directors consider that a three-year period to March 2028 is an
appropriate period to review for assessing the Company's viability. This
reflects greater predictability of the Company's cash flows over that time
period and is aligned to the Company's risk review cycle. There is increased
uncertainty surrounding economic, political and regulatory changes over the
longer term.
The stress testing focuses on the principal risks, but also reflects those new
and emerging risks that are considered to be of sufficient importance to
require active monitoring by the Audit and Risk Committee. The scenarios used
are described in the Viability statement. The medium-term resilience of the
Company is assessed through analysing the impact of these scenarios on key
metrics such as total return, income yield, net asset value, covenants on the
RCF and available liquidity.
Viability statement
The Directors consider the medium-term prospects of the Company to be
favourable. The Company has a diverse portfolio of infrastructure investments,
producing good and reasonably predictable levels of income which cover the
dividend and costs. The defensive nature of the portfolio and of the essential
services that the businesses in which we invest provide to their customers,
are being demonstrated in the current climate. The Investment Manager has a
strong track record of investing in carefully selected businesses and of
driving value through an active asset management approach. The Directors
consider that this portfolio can continue to meet the Company's objectives.
The Directors have assessed the viability of the Company over a three-year
period to March 2028. The Directors have taken account of the current position
of the Company, including its liquidity position, with £4 million of cash and
£640 million of undrawn credit facilities, and the principal risks it faces,
which are documented in the Principal risks and mitigations table.
The Directors have considered the potential impact on the Company of a number
of scenarios in addition to the Company's business plan and recent forecasts,
which quantify the financial impact of the principal risks occurring. These
scenarios represent severe yet plausible circumstances that the Company could
experience, including a significant impairment in the value of the portfolio
and a reduction in the cash flows available from portfolio companies from a
variety of causes.
The assessment was conducted over several months, during which the proposed
scenarios were evaluated by the Board, the assumptions set, and the analysis
produced and reviewed. Analysis included the impact of a prolonged liquidity
constraint for the Company resulting from not being able to sell assets or
raise equity due to unfavourable market conditions.
Other considerations included the possible impact of climate-related events
and transition risks, widespread economic turmoil, escalating geopolitical
conflicts, a tightening of debt markets and the failure of a large investment.
The assumptions used to model these scenarios included: a fall in value of up
to 30% for some or all of the portfolio companies; a full write-down of a
large asset; a reduction in cash flows from portfolio companies; a reduction
in the level of new investment and/or realisations; the imposition of
additional taxes on distributions from or transactions in the portfolio
companies; an increase in the cost of debt by up to 3.5% and restriction in
debt availability; a sustained devaluation in sterling increasing the
liquidity requirements for the hedging programme and an inability for the
Company to raise new equity. The implications of changes in the inflation,
interest rate and foreign exchange environment were also considered,
separately and in combination.
The results of this assessment showed that the Company would be able to
withstand the impact of these scenarios occurring over the three-year period.
The Directors also considered scenarios that would represent a serious threat
to its liquidity and viability in that time period.
These scenarios were considered to be remote, such as markets closed to new
equity issue, a fall in equity value of the portfolio of more than 40% whilst
being fully drawn on the RCF, or an equivalent fall in income.
In such circumstances additional options may be available to mitigate the
impact on the Company's liquidity and cash flow including:
(i) sell assets
(ii) reductions in operating and capital expenditure or raising additional
debt at portfolio company level to fund distributions to the Company
(iii) extension of debt facilities
(iv) the potential to raise additional funds from other sources
Based on this assessment, the Directors have a reasonable expectation that the
Company will be able to continue in operation and meet its liabilities as they
fall due over the three-year period to March 2028.
Long-term resilience
As described above, the long-term resilience of the Company, beyond the
Viability statement period, comes from the effective implementation of our
business model and consistent delivery of our strategic objectives.
Our approach to origination and portfolio construction, focus on price
discipline, and active asset management approach enable us to adapt in
response to new and emerging risks and challenges, including climate change
and developments in megatrends.
The characteristics that are commonly found across our portfolio, described in
our Investment Characteristics, support the long-term resilience of the
Company.
The underlying megatrends supporting the longer-term resilience of each
portfolio company are identified in the Megatrends section.
We have a long-term investment time horizon made possible by our permanent
capital base that is unconstrained by the fixed investment period and
fundraising cycle seen in private limited partnership funds.
Although the scenarios and stress testing to support the Viability statement
are modelled over a three-year time horizon, the resilience shown by the
Company, and its ability to recover from these stressed situations, supports
the assessment of our resilience over a longer term than three years.
Directors' duties
Section 172 statement
The Company adheres to the AIC Corporate Governance Code (the 'AIC Code'),
which is endorsed by the Financial Reporting Council ('FRC') and supported by
the Jersey Financial Services Commission ('JFSC'). This enables the Company to
report on matters set out in section 172 of the Companies Act 2006 ('s172') to
the extent they do not conflict with Jersey law.
We recognise that our business can only grow and prosper by acting in the
long-term interests of our key stakeholders, and that a good understanding of
the issues affecting stakeholders should be an integral part of the Board's
decision-making process. The insights that the Board gains through the
stakeholder engagement mechanisms it has in place form an important part of
the overall context for all the Board's discussions and decision-making
processes.
As an externally managed investment trust, the Company has no employees or
customers and its key stakeholders are its shareholders, third-party
professional advisers and service providers (most notably the Investment
Manager), portfolio companies, lenders, and government and regulatory bodies.
Day-to-day engagement with our stakeholders is principally managed by the
Investment Manager, although, where appropriate, the Directors have direct
touchpoints with stakeholders during the year.
Pursuant to s172, a director of a company must act in a way they consider, in
good faith, would be most likely to promote the success of the company for the
benefit of its members as a whole, and in doing so have regard to the
following factors:
The likely consequences of any decision in the long term
Our purpose and strategy, combined with the responsible investment approach of
the Investment Manager, focus on achieving long-term success.
The interests of the company's employees
Whilst we do not have any employees, our purpose includes the intention to
have a positive influence on our portfolio companies and their stakeholders,
which includes the employees of those portfolio companies.
The need to foster the company's business relationships with suppliers,
customers and others
We engage with all our stakeholders, whether directly or through the
Investment Manager, in an open and transparent way to foster strong business
relationships.
The impact of the company's operations on the community and the environment
As owners of infrastructure businesses with majority or significant minority
holdings and representation on their boards, we recognise our ability to
influence our portfolio companies to ensure they act responsibly.
The desirability of maintaining a reputation for high standards of business
conduct
Our success relies on maintaining a positive reputation, and our values and
ethics are aligned to our purpose, our strategy and our ways of working.
The need to act fairly towards members of the company
The Board actively engages with its shareholders and considers their interests
when implementing our strategy.
Read more in our Annual report and accounts 2025, available on our website.
Accounts and other information
Statement of comprehensive income
For the year to 31 March
2025 2024
Notes £m £m
Net gains on investments 7 182 180
Investment income 7 203 193
Interest receivable 1 1
Investment return 386 374
Movement in the fair value of derivative financial instruments 5 34 73
Management and performance fees payable 2 (67) (75)
Operating expenses 3 (4) (4)
Finance costs 4 (31) (35)
Exchange movements 15 14
Profit before tax 333 347
Income taxes 6 - -
Profit after tax and profit for the year 333 347
Total comprehensive income for the year 333 347
Earnings per share
Basic and diluted (pence) 14 36.1 37.6
Statement of changes in equity
For the year to 31 March
Stated Total
capital Retained Capital Revenue shareholders'
account reserves(1) reserve(1) reserve(1) equity
2025 Notes £m £m £m £m £m
Opening balance at 1 April 2024 879 1,282 1,173 8 3,342
Total comprehensive income for the year - - 202 131 333
Dividends paid to shareholders of the Company during the year 15 - - - (113) (113)
Closing balance at 31 March 2025 879 1,282 1,375 26 3,562
Stated Total
capital Retained Capital Revenue shareholders'
account reserves(1) reserve(1) reserve(1) equity
2024 Notes £m £m £m £m £m
Opening balance at 1 April 2023 879 1,282 940 - 3,101
Total comprehensive income for the year - - 233 114 347
Dividends paid to shareholders of the Company during the year 15 - - - (106) (106)
Closing balance at 31 March 2024 879 1,282 1,173 8 3,342
1 The Retained reserves, Capital reserve and Revenue reserve are distributable
reserves. Retained reserves relate to the period prior to 15 October 2018.
Further information can be found in Accounting policy H.
Balance Sheet
As at 31 March
2025 2024
Notes £m £m
Assets
Non-current assets
Investments at fair value through profit or loss 7 3,790 3,842
Derivative financial instruments 10 33 49
Total non-current assets 3,823 3,891
Current assets
Derivative financial instruments 10 49 33
Trade and other receivables 8 2 3
Cash and cash equivalents 4 5
Total current assets 55 41
Total assets 3,878 3,932
Liabilities
Non-current liabilities
Derivative financial instruments 10 (3) -
Trade and other payables 12 (20) (32)
Loans and borrowings 11 (260) (510)
Total non-current liabilities (283) (542)
Current liabilities
Derivative financial instruments 10 (2) (5)
Trade and other payables 12 (31) (43)
Total current liabilities (33) (48)
Total liabilities (316) (590)
Net assets 3,562 3,342
Equity
Stated capital account 13 879 879
Retained reserves 1,282 1,282
Capital reserve 1,375 1,173
Revenue reserve 26 8
Total equity 3,562 3,342
Net asset value per share
Basic and diluted (pence) 14 386.2 362.3
The Financial statements and related Notes were approved and authorised for
issue by the Board of Directors on 7 May 2025 and signed on its behalf by:
Richard Laing
Chair
Cash flow statement
For the year to 31 March
2025 2024
£m £m
Cash flow from operating activities
Purchase of investments (52) (104)
Proceeds from partial realisations of investments(1) 202 41
Proceeds from full realisations of investments 257 183
Investment income(2) 30 53
Operating expenses paid (4) (4)
Interest received 1 1
Management and performance fees paid (92) (86)
Amounts received on the settlement of derivative contracts 34 34
Net cash flow from operating activities 376 118
Cash flow from financing activities
Fees and interest paid on financing activities (29) (35)
Dividends paid (113) (106)
Drawdown of revolving credit facility 239 402
Repayment of revolving credit facility (476) (379)
Net cash flow from financing activities (379) (118)
Change in cash and cash equivalents (3) -
Cash and cash equivalents at the beginning of the year 5 5
Effect of exchange rate movement 2 -
Cash and cash equivalents at the end of the year 4 5
1 Proceeds from partial realisations includes non-income cash of £172 million
(2024: £14 million).
2 Investment income includes dividends of £7 million (2024: £9 million) and
interest of £23 million (2024: £44 million).
Reconciliation of net cash flow to movement in net debt
For the year to 31 March
2025 2024
£m £m
Change in cash and cash equivalents (3) -
Drawdown of revolving credit facility (239) (402)
Repayment of revolving credit facility 476 379
Change in net debt resulting from cash flows 234 (23)
Movement in net debt 234 (23)
Net debt at the beginning of the year (505) (496)
Effect of exchange rate movement 15 14
Net debt at the end of the year (256) (505)
Significant accounting policies
Corporate information
3i Infrastructure plc (the 'Company') is a company incorporated in Jersey,
Channel Islands. The Financial statements for the year to 31 March 2025
comprise the Financial statements of the Company only as explained in the
Basis of preparation.
These Financial statements were authorised for issue by the Board of Directors
on 7 May 2025.
Statement of compliance
These Financial statements have been prepared in accordance with UK-adopted
International Accounting Standards.
These Financial statements have also been prepared in accordance with and in
compliance with the Companies (Jersey) Law 1991.
Basis of preparation
In accordance with IFRS 10 Consolidated Financial Statements (as amended),
entities that meet the definition of an investment entity are required to
measure certain investments in subsidiaries at fair value through profit or
loss in accordance with IFRS 9 Financial Instruments, rather than consolidate
their results. The Company does not have any consolidated subsidiaries, which
would include subsidiaries that are not themselves investment entities and
whose main purpose and activities are to provide investment-related services
to the Company.
The Financial statements of the Company are presented in sterling, the
functional currency of the Company, rounded to the nearest million except
where otherwise indicated.
The preparation of financial statements in conformity with IFRS requires the
Board to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on experience
and other factors that are believed to be reasonable under the circumstances,
the results of which form the basis of determining the carrying values of
assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The statutory accounts for the year to 31 March 2025 have not yet been
delivered to the Jersey Financial Services Commission. The statutory accounts
for the year to 31 March 2024 have been delivered to the Jersey Financial
Services Commission. The auditor's reports on the statutory accounts for these
years are unqualified. This announcement does not constitute statutory
accounts. The preliminary announcement is prepared on the same basis as set
out in the statutory accounts for the year to 31 March 2024.
Going concern
The Financial statements are prepared on a going concern basis as disclosed in
the Risk report, as the Directors are satisfied that the Company has the
resources to continue in business for the foreseeable future. The Directors
have made an assessment of going concern, taking into account a wide range of
information relating to present and future conditions, including the Company's
cash and liquidity position, current performance and outlook, which considered
the impact of the higher inflationary and interest rate environment, ongoing
geopolitical uncertainties and current and expected financial commitments,
using the information available up to the date of issue of these Financial
statements. As part of this assessment the Directors considered:
• the analysis of the adequacy of the Company's liquidity, solvency
and capital position. The Company manages and monitors liquidity regularly,
ensuring it is adequate and sufficient. At 31 March 2025, liquidity remained
strong at £644 million (2024: £395 million). Liquidity comprised cash and
deposits of £4 million (2024: £5 million) and undrawn RCF of £640 million
(2024: £390 million) with a maturity date of November 2026. The RCF was
refinanced on 30 April 2025 with a maturity date in June 2028. Income and
non-income cash is expected to be received from the portfolio investments
during the coming year, a portion of which will be required to support the
payment of the dividend target and the Company's other financial commitments;
• uncertainty around the valuation of the Company's assets as set out
in the Key sources of estimation uncertainties section. The valuation policy
and process was consistent with prior years. This year a key focus of the
portfolio valuations at 31 March 2025 was an assessment of the impact of the
macroeconomic environment on the operational and financial performance of each
portfolio company. In particular, this focused on inflation, interest rates
and the impact on the cost of debt, power prices and ongoing geopolitical
uncertainties. We have incorporated into our cash flow forecasts a balanced
view of future income receipts and expenses; and
• the Company's financial commitments. The Company had no investment
commitments at 31 March 2025 (2024: none). The Company had ongoing charges of
£53 million in the year to 31 March 2025, detailed in Table 17 in the
Financial review, which are indicative of the ongoing run rate in the short
term. The Company has a FY25 performance fee accrual of £18 million, a third
of which is payable within the next 12 months. The Company has a FY24
performance fee accrual of £17 million relating to the second and third
instalments of the FY24 fee, the second instalment being due within the next
12 months, an accrual of £15 million relating to the third instalment of the
FY23 fee due within the next 12 months, and a proposed final dividend for FY25
of £58 million. In addition, while not a commitment at 31 March 2025, the
Company has a dividend target for FY26 of 13.45 pence per share.
In addition to the considerations listed above, there are a number of actions
within management control to enhance available liquidity. These include the
timing of certain income receipts from the portfolio, and the level and timing
of new investments or realisations.
Having performed the assessment of going concern, the Directors considered it
appropriate to prepare the Financial statements of the Company on a going
concern basis. The Company has sufficient financial resources and liquidity
and is well placed to manage business risks in the current economic
environment and can continue operations for a period of at least 12 months
from the date of approval of these Financial statements.
Key judgements
The preparation of financial statements in accordance with IFRS requires the
Directors to exercise judgement in the process of applying the accounting
policies defined below. The following policies are areas where a higher degree
of judgement has been applied in the preparation of the Financial statements.
(i) Assessment as investment entity - Entities that meet the
definition of an investment entity within IFRS 10 are required to measure
their subsidiaries at fair value through profit or loss rather than
consolidate them unless they provided investment-related services to the
Company. To determine that the Company continues to meet the definition of an
investment entity, the Company is required to satisfy the following three
criteria:
(a) the Company obtains funds from one or more investors for
the purpose of providing those investor(s) with investment management
services;
(b) the Company commits to its investor(s) that its business
purpose is to invest funds solely for returns from capital appreciation,
investment income, or both; and
(c) the Company measures and evaluates the performance of
substantially all of its investments on a fair value basis.
The Company meets the criteria as follows:
• the stated strategy of the Company is to deliver stable returns to
shareholders through a mix of income yield and capital appreciation;
• the Company provides investment management services and has several
investors who pool their funds to gain access to infrastructure-related
investment opportunities that they might not have had access to individually;
and
• the Company has elected to measure and evaluate the performance of
all of its investments on a fair value basis. The fair value method is used to
represent the Company's performance in its communication to the market,
including investor presentations. In addition, the Company reports fair value
information internally to Directors, who use fair value as the primary
measurement attribute to evaluate performance.
The Directors are of the opinion that the Company has all the typical
characteristics of an investment entity and continues to meet the definition
in the standard. This conclusion will be reassessed on an annual basis.
(ii) Assessment of investments as structured entities - A
structured entity is an entity that has been designed so that voting or
similar rights are not the dominant factor in deciding who controls the
entity. Additional disclosures are required by IFRS 12 for interests in
structured entities, whether they are consolidated or not. The Directors have
assessed whether the entities in which the Company invests should be
classified as structured entities and have concluded that none of the entities
should be classified as structured entities as voting rights are the dominant
factor in deciding who controls these entities.
(iii) Assessment of consolidation requirements - The Company
holds significant stakes in the majority of its investee companies and must
exercise judgement in the level of control of the underlying investee company
that is obtained in order to assess whether the Company should be classified
as a subsidiary.
The Company must also exercise judgement in whether a subsidiary provides
investment-related services or activities and therefore should be consolidated
or held at fair value through profit or loss. Further details are shown in
significant accounting policy 'A Classification' below.
The adoption of certain accounting policies by the Company also requires the
use of certain critical accounting estimates in determining the information to
be disclosed in the Financial statements.
Key sources of estimation uncertainties
Valuation of the investment portfolio
The key area where estimates are significant to the Financial statements and
have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year is in the
valuation of the investment portfolio. The portfolio is well-diversified by
sector, geography and underlying risk exposures. The key risks to the
portfolio are discussed in further detail in the Risk report.
The majority of assets in the investment portfolio are valued on a discounted
cash flow basis, which requires assumptions to be made regarding future cash
flows, terminal value and the discount rate to be applied to these cash flows.
The methodology for deriving the fair value of the investment portfolio,
including the key estimates, is set out in the Summary of portfolio valuation
methodology section. Refer to Note 7 for further details of the valuation
techniques, significant inputs to those techniques and sensitivity of the fair
value of these investments to the assumptions that have been made.
The discount rate applied to the cash flows in each investment portfolio
company is considered one of the most significant unobservable inputs and, in
addition to inflation and interest rates, represents the key sources of
estimation uncertainty that have a significant risk of causing a material
impact on the 'Investments at fair value through profit or loss' within the
next financial year, which is further discussed in Note 7.
The acquisition discount rate is adjusted to reflect changes in
company-specific risks to the deliverability of future cash flows and is
calibrated against secondary market information and other available data
points, including comparable transactions. The discount rates applied to the
investment portfolio at 31 March 2025 range from 10.3% to 14.0% (2024: 10.0%
to 14.0%) and the weighted average discount rate applied to the investment
portfolio is 11.3% (2024:11.3%). There is no change to the weighted average
discount rate in the year despite the evolution of the portfolio mix following
the realisation of Valorem, the follow-on investments in DNS:NET and Future
Biogas and syndication of Future Biogas.
The cash flows on which the discounted cash flow valuation is based are
derived from detailed financial models. These incorporate a number of other
assumptions with respect to individual portfolio companies, and are not
expected to cause a material adjustment within the next financial year, but
include: forecast new business wins or new orders; cost-cutting initiatives;
liquidity and timing of debtor payments; timing of non-committed capital
expenditure and construction activity; the terms of future debt refinancing;
and macroeconomic assumptions such as inflation and energy prices. Future
power price projections are taken from independent forecasters, and changes in
these assumptions will affect the future value of our energy generating
portfolio companies. The terminal value attributes a residual value to the
portfolio company at the end of the projected discrete cash flow period based
on market comparables. The terminal value assumptions consider climate change
risk, stranded asset risk and the impact of wider megatrends such as the
transition to a lower-carbon economy and climate change. The effects of
climate change, including extreme weather patterns or rising sea levels in the
longer term, could impact the valuation of the assets in the portfolio in
different ways.
The Summary of portfolio valuation methodology section provides further
details on some of the assumptions that have been made in deriving a balanced
base case of cash flows including deriving terminal values and some of the
risk factors considered in the cash flow forecasts.
New and amended standards adopted for the current year
There were no standards and amendments to standards applicable to the Company
that became effective during the year that were adopted by the Company.
Standards and amendments issued but not yet effective
As at 31 March 2025, the following new or amended standards, applicable to the
Company, which have not been applied in these Financial statements, had been
issued by the International Accounting Standards Board ('IASB') but are yet to
become effective:
IFRS S1 General Requirements for Disclosure of Sustainability-related
Financial Information (1 January 2024)
IFRS S2 Climate-related Disclosures (1 January 2024)
Amendments to the Sustainability Accounting Standard Board ('SASB') standards
to enhance their international applicability
(1 January 2025)
Amendments to IAS 21 regarding the Lack of Exchangeability (1 January 2025)
Amendments IFRS 9 and IFRS 7 regarding the classification and measurement of
financial instruments (1 January 2026)
Annual Improvements to IFRS Accounting Standards - Volume 11 (1 January 2026)
IFRS 18 Presentation and Disclosures in Financial Statements (1 January 2027)
The Company intends to adopt these standards when they become effective, but
does not currently anticipate that these standards will have a significant
impact on the Company's Financial statements. Current assumptions regarding
the impact of future standards will remain under consideration in light of
interpretation notes as and when they are issued.
A Classification
(i) Subsidiaries - Subsidiaries are entities controlled by
the Company. Control exists when the Company is exposed, or has rights, to
variable returns from its involvement with the subsidiary entity and has the
ability to affect those returns through its power over the subsidiary entity.
In accordance with the exception under IFRS 10 Consolidated Financial
Statements, the Company only consolidates subsidiaries in the Financial
statements if they are deemed to perform investment-related services and do
not meet the definition of an investment entity. Investments in subsidiaries
that do not meet this definition are accounted for as Investments at fair
value through profit or loss, with changes in fair value recognised in the
Statement of comprehensive income in the year. The Directors have assessed all
entities within the structure and concluded that there are no subsidiaries of
the Company that provide investment-related services or activities.
(ii) Associates - Associates are those entities in which the
Company has significant influence, but not control, over the financial and
operating policies. Investments that are held as part of the Company's
investment portfolio are carried in the Balance sheet at fair value, even
though the Company may have significant influence over those entities.
(iii) Joint ventures - Interests in joint ventures that are held
as part of the Company's investment portfolio are carried in the Balance sheet
at fair value. This treatment is permitted by IFRS 11 and IAS 28, which allows
interests held by venture capital organisations where those investments are
designated, upon initial recognition, as at fair value through profit or loss
and accounted for in accordance with IFRS 9, with changes in fair value
recognised in the Statement of comprehensive income in the year.
B Exchange differences
Transactions entered into by the Company in a currency other than its
functional currency are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are translated to the
functional currency at the exchange rate ruling at the Balance sheet date.
Foreign exchange differences arising on translation to the functional currency
are recognised in the Statement of comprehensive income. Foreign exchange
differences relating to investments held at fair value through profit or loss
are shown within the line Net gains on investments. Foreign exchange
differences relating to other assets and liabilities are shown within the line
Exchange movements.
Non-monetary assets and liabilities that are measured in terms of historical
cost in a foreign currency are translated using the exchange rate at the date
of the transactions. Non-monetary assets and liabilities denominated in
foreign currencies that are stated at fair value are translated to the
functional currency using exchange rates ruling at the date the fair value was
determined, with the associated foreign exchange difference being recognised
within the unrealised gain or loss on revaluation of the asset or liability.
C Investment portfolio
Recognition and measurement - Investments are recognised and de-recognised on
a date where the purchase or sale of an investment is under a contract whose
terms require the delivery or settlement of the investment.
The Company manages its investments with a view to profiting from the receipt
of investment income and obtaining capital appreciation from changes in the
fair value of investments. Therefore, all unquoted investments are measured at
fair value through profit or loss upon initial recognition and subsequently
carried in the Balance sheet at fair value, applying the Company's valuation
policy. Acquisition-related costs are accounted for as expenses when incurred.
Net gains or losses on investments are the movement in the fair value of
investments between the start and end of the accounting period, or investment
disposal date, or the investment acquisition date and the end of the
accounting period, including divestment-related costs where applicable,
converted into sterling using the exchange rates in force at the end of the
period; and are recognised in the Statement of comprehensive income.
Income
Investment income is that portion of income that is directly related to the
return from individual investments. It is recognised to the extent that it is
probable that there will be an economic benefit and the income can be reliably
measured.
The following specific recognition criteria must be met before the income is
recognised:
• dividends from equity investments are recognised in the Statement of
comprehensive income when the Company's rights to receive payment have been
established. Special dividends are credited to capital or revenue according to
their circumstances;
• interest income from loans that are measured at fair value through
profit or loss is recognised as it accrues by reference to the principal
outstanding and the effective interest rate applicable, which is the rate that
exactly discounts the estimated future cash flows through the expected life of
the financial asset to the asset's carrying value or principal amount. The
remaining changes in the fair value movement of the loans are recognised
separately in the line Net gains on investments in the Statement of
comprehensive income;
• distributions from investments in Limited Partnerships are
recognised in the Statement of comprehensive income when the Company's rights
as a Limited Partner to receive payment have been established; and
• fees receivable represent amounts earned from investee companies on
completion of underlying investment transactions and are recognised on an
accruals basis once entitlement to the revenue has been established.
D Fees
(i) Fees - Fees payable represent fees incurred in the
process of acquiring an investment and are measured on the accruals basis.
(ii) Management fees - A management fee is payable to 3i plc,
calculated as a tiered fee based on the gross investment value of the Company,
and is accrued in the period it is incurred. Further details on how this fee
is calculated are provided in Note 18.
(iii) Performance fee - The Investment Manager is entitled to a
performance fee based on the total return generated in the period in excess of
a performance hurdle of 8%. The fee is payable in three equal annual
instalments and is accrued in full in the period it is incurred. Further
details are provided in Note 18.
(iv) Finance costs - Finance costs associated with loans and
borrowings are recognised on an accruals basis using the effective interest
method.
E Treasury assets and liabilities
Short and long-term treasury assets and short and long-term treasury
liabilities are used to manage cash flows and the overall costs of borrowing.
Financial assets and liabilities are recognised in the Balance sheet when the
relevant company entity becomes a party to the contractual provisions of the
instrument.
(i) Cash and cash equivalents - Cash and cash equivalents in
the Balance sheet and Cash flow statement comprise cash at bank, short-term
deposits with an original maturity of three months or less and amounts held in
AAA-rated money market funds which are readily convertible into cash and there
is an insignificant risk of changes in value. Money market funds are accounted
for at amortised cost under IFRS 9. However, due to their short-term and
liquid nature, this is the same as fair value. Interest receivable or payable
on cash and cash equivalents is recognised on an accruals basis.
(ii) Bank loans, loan notes and borrowings - Loans and
borrowings are initially recognised at the fair value of the consideration
received, net of issue costs associated with the borrowings. Where issue costs
are incurred in relation to arranging debt finance facilities, these are
capitalised and disclosed within Trade and other receivables and amortised
over the life of the loan.
After initial recognition, loans and borrowings are subsequently measured at
amortised cost using the effective interest method, which is the rate that
exactly discounts the estimated future cash flows through the expected life of
the liabilities. Amortised cost is calculated by taking into account any issue
costs and any discount or premium on settlement.
(iii) Derivative financial instruments - Derivative financial
instruments are used to manage the risk associated with foreign currency
fluctuations in the valuation of the investment portfolio. This is achieved by
the use of forward foreign currency contracts. Such instruments are used for
the sole purpose of efficient portfolio management. All derivative financial
instruments are held at fair value through profit or loss.
Derivative financial instruments are recognised initially at fair value on the
contract date and subsequently remeasured to the fair value at each reporting
date. All changes in the fair value of derivative financial instruments are
taken to the Statement of comprehensive income.
The maturity profile of derivative contracts is measured relative to the
financial contract settlement date of each contract, and the derivative
contracts are disclosed in the Financial statements as either current or
non-current accordingly.
F Other assets
Assets, other than those specifically accounted for under a separate policy,
are stated at their consideration receivable less impairment losses. Such
assets are short-term in nature and the carrying value of these assets is
considered to be approximate to their fair value. Assets are reviewed for
recoverability and impairment using the expected credit loss model simplified
approach. The Company will recognise the asset's lifetime expected credit
losses at each reporting period where applicable in the Statement of
comprehensive income. An impairment loss is reversed at subsequent financial
reporting dates to the extent that the asset's carrying amount does not exceed
its carrying value, had no impairment been recognised.
Assets with maturities less than 12 months are included in current assets and
assets with maturities greater than 12 months after the Balance sheet date are
classified as non-current assets.
G Other liabilities
Liabilities, other than those specifically accounted for under a separate
policy, are stated based on the amounts which are considered to be payable in
respect of goods or services received up to the financial reporting date. Such
liabilities are short-term in nature and the carrying value of these
liabilities is considered to be approximate to their fair value.
H Equity and reserves
(i) Share capital - Share capital issued by the Company is
recognised at the fair value of proceeds received and is credited to the
Stated capital account. Direct issue costs net of tax are deducted from the
fair value of the proceeds received.
(ii) Equity and reserves - The Stated capital account of the
Company represents the cumulative proceeds recognised from share issues or new
equity issued on the conversion of warrants made by the Company net of issue
costs and reduced by any amount that has been transferred to Retained
reserves, in accordance with Jersey Company Law, in previous years.
Share capital is treated as an equity instrument, on the basis that no
contractual obligation exists for the Company to deliver cash or other
financial assets to the holder of the instrument.
On 15 October 2018, the Company became UK tax domiciled and, with effect from
that date, was granted UK-approved investment trust status. Financial
statements prepared under IFRS are not strictly required to apply the
provisions of the Statements of Recommended Practice issued by the UK
Association of Investment Companies for the financial statements of Investment
Trust Companies (the 'AIC SORP'). However, where relevant and appropriate, the
Directors have looked to follow the recommendations of the AIC SORP. From this
date, the retained profits of the Company have been applied to two new
reserves, being the Capital reserve and the Revenue reserve. These are in
addition to the existing Retained reserves which incorporate the cumulative
retained profits of the Company (after the payment of dividends) plus any
amounts that have been transferred from the Stated capital account of the
Company to 15 October 2018. The Directors do not believe a separate
presentation of revenue and capital in the Statement of comprehensive income
would materially change a user's understanding of the financial statements.
The Directors have exercised their judgement in applying the AIC SORP and a
summary of these judgements is as follows:
• Net gains on investments are applied wholly to the Capital reserve
as they relate to the revaluation or disposal of investments;
• Dividends are applied to the Revenue reserve, except under specific
circumstances where a dividend arises from a return of capital or proceeds
from a refinancing, when they are applied to the Capital reserve
• Fees payable are applied to the Capital reserve where the service
provided is, in substance, an intrinsic part of an intention to acquire or
dispose of an investment;
• Movement in the fair value of derivative financial instruments is
applied to the Capital reserve as the derivative hedging programme is
specifically designed to reduce the volatility of sterling valuations of the
non-sterling denominated investments;
• Management fees are applied to the Revenue reserve as they reflect
ongoing asset management. Where a transaction fee element is due on the
acquisition of an investment, it is applied to the Capital reserve;
• Performance fees are applied wholly to the Capital reserve as they
arise mainly from capital returns on the investment portfolio;
• Operating costs are applied wholly to the Revenue reserve as there
is no clear connection between the operating expenses of the Company and the
purchase and sale of an investment;
• Finance costs are applied wholly to the Revenue reserve as the
existing borrowing is not directly linked to an investment; and
• Exchange movements are applied to the Revenue reserve where they
relate to exchange on non-portfolio assets.
(iii) Dividends payable - Dividends on ordinary shares are
recognised in the period in which the Company's obligation to make the
dividend payment arises. For the period to 15 October 2018, dividends were
deducted from Retained reserves. For subsequent periods, dividends are
deducted first from the Revenue reserve, then from the Capital reserve, and
finally from the Retained reserves if required.
I Income taxes
Income taxes represent the sum of the tax currently payable, withholding taxes
suffered and deferred tax. Tax is charged or credited in the Statement of
comprehensive income, except where it relates to items charged or credited
directly to equity, in which case the tax is also dealt with in equity.
The tax currently payable is based on the taxable profit for the year. This
may differ from the profit included in the Statement of comprehensive income
because it excludes items of income or expense that are taxable or deductible
in other years, and it further excludes items that are never taxable or
deductible.
To enable the tax charge to be based on the profit for the year, deferred tax
is provided in full on temporary timing differences, at the rates of tax
expected to apply when these differences crystallise. Deferred tax assets are
recognised only to the extent that it is probable that sufficient taxable
profits will be available against which temporary differences can be set off.
In practice, some assets that are likely to give rise to timing differences
will be treated as capital for tax purposes.
Given that capital items are exempt from tax under the Investment Trust
Company rules, deferred tax is not expected to be recognised on these
balances. All deferred tax liabilities are offset against deferred tax assets,
where appropriate, in accordance with the provisions of IAS 12.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Notes to the accounts
1 Operating segments
The Directors are of the opinion that the Company is engaged in a single
segment of business, being investment in core-plus infrastructure. The
internal information shared with the Directors on a monthly basis to allocate
resources, assess performance and manage the Company, presents the business as
a single segment comprising the total portfolio of investments.
The Company is an investment holding company and does not consider itself to
have any customers. Given the nature of the Company's operations, the Company
is not considered to be exposed to any operational seasonality or cyclicality
that would impact the financial results of the Company during the year or the
financial position of the Company at 31 March 2025.
2 Management and performance fees payable
2025 2024
Year to 31 March £m £m
Management fee 49 49
Performance fee 18 26
67 75
Total management and performance fees payable by the Company for the year to
31 March 2025 were £67 million (2024: £75 million). Note 18 provides further
details on the calculation of the management fee and performance fee.
3 Operating expenses
Operating expenses include the following amounts:
2025 2024
Year to 31 March £m £m
Audit fees 0.8 0.8
Directors' fees and expenses 0.6 0.6
In addition to the fees described above, audit fees of £0.1 million (2024:
£0.1 million) are payable by unconsolidated subsidiary entities for the year
to 31 March 2025 to the Company's auditor.
Services provided by the Company's auditor
During the year, the Company obtained the following services from the
Company's auditor, Deloitte LLP.
2025 2024
Audit services £m £m
Statutory audit¹ Company 0.6 0.6
UK and Jersey unconsolidated subsidiaries² 0.1 0.1
1 Amounts exclude VAT.
2 These amounts are payable from unconsolidated subsidiary entities and do not
form part of operating expenses but are included in the Net gains on
investments.
Non-audit services
Deloitte LLP and its associates rendered non-audit services to the Company,
totalling £109,454 for the year to 31 March 2025 (2024: £103,902). These
services included agreed-upon procedures related to management and performance
fees £9,340 (2024: £8,981), sustainability KPIs for the RCF reporting
£32,076 (2024: £29,500) and a review of the interim financial statements
£68,038 (2024: £65,421). In line with the Company's policy, Deloitte LLP
provided non-audit services to certain unconsolidated investee companies. The
fees for these services are typically borne by the respective investee
companies or unconsolidated subsidiaries and are therefore are not included in
the Company's expenses. Details on how such non-audit services are monitored
and approved can be found in the Governance section.
4 Finance costs
2025 2024
Year to 31 March £m £m
Finance costs associated with the debt facilities 30 32
Professional fees payable associated with the arrangement of debt financing 1 3
31 35
The finance costs associated with the debt facilities have decreased for the
year to 31 March 2025 as a result of lower average drawings and decreased
EURIBOR rates. The average monthly drawn position during the year was £558
million (2024: £586 million) and the average monthly total available
facilities was £342 million (2024: £314 million).
5 Movement in the fair value of derivative financial instruments
2025 2024
Year to 31 March £m £m
Movement in the fair value of foreign exchange forward contracts 34 73
The movement in the fair value of derivative financial instruments is included
within Profit before tax but not included within Investment return.
6 Income taxes
2025 2024
Year to 31 March £m £m
Current taxes
Current year - -
Total income tax charge in the Statement of comprehensive income - -
Reconciliation of income taxes in the Statement of comprehensive income
The tax charge for the year is different from the standard rate of corporation
tax in the UK, currently 25% (2024: 25%), and the differences are explained
below:
2025 2024
Year to 31 March £m £m
Profit before tax 333 347
Profit before tax multiplied by rate of corporation tax in the UK of 25% 83 87
(2024: 25%)
Effects of:
Non-taxable capital profits due to UK-approved investment trust company status (54) (63)
Non-taxable dividend income (2) (2)
Dividends designated as interest distributions (27) (21)
Utilisation of previously unrecognised tax losses - (1)
Total income tax charge in the Statement of comprehensive income - -
The Company's affairs are directed so as to allow it to meet the requisite
conditions to continue to operate as an approved investment trust company for
UK tax purposes. The approved investment trust status allows certain capital
profits of the Company to be exempt from tax in the UK and also permits the
Company to designate the dividends it pays, wholly or partly, as interest
distributions. These features enable approved investment trust companies to
ensure that their investors do not ultimately suffer double taxation of their
investment returns, ie once at the level of the investment fund vehicle and
then again in the hands of the investors.
As at 31 March 2025, the Company had unused tax losses of £10 million (2024:
£12 million) available for offset against future profits and these losses may
be carried forward indefinitely. In view of the restrictions on utilising
brought forward losses introduced from 1 April 2017, combined with the
uncertainty as to whether the Company will generate sufficient taxable
profits, not covered by its Investment Trust exemption, in the foreseeable
future, no deferred tax asset has been recognised in respect of these losses.
Where relevant, deferred tax assets and liabilities are calculated using the
corporation tax rate in the UK of 25% (2024: 25%).
7 Investment at fair value through profit or loss and financial instruments
All financial instruments for which fair value is recognised or disclosed are
categorised within the fair value hierarchy, described as follows, based on
the lowest level input that is significant to the fair value measurement as a
whole:
Level Fair value input description Financial instruments
Level 1 Quoted prices (unadjusted and in active markets) Quoted equity investments
Level 2 Inputs other than quoted prices included in Level 1 that are observable in the Derivative financial instruments held at fair value
market either directly (ie as prices) or indirectly (ie derived from prices)
Level 3 Inputs that are not based on observable market data Unquoted investments and unlisted funds
For assets and liabilities that are recognised in the Financial statements on
a recurring basis, the Company determines whether transfers have occurred
between levels in the hierarchy by reassessing the categorisation (based on
the lowest level input that is significant to the fair value measurement as a
whole) for each reporting period.
The table below shows the classification of financial instruments held at fair
value into the fair value hierarchy at 31 March 2025. For all other assets and
liabilities, their carrying value approximates to fair value. During the year
ended 31 March 2025, there were no transfers of financial instruments between
levels of the fair value hierarchy (2024: none).
Trade and other receivables in the Balance sheet includes £1 million of
deferred finance costs relating to the arrangement fee for the RCF (2024: £2
million). This has been excluded from the table below as it is not categorised
as a financial instrument.
Financial instruments classification
As at 31 March 2025
Level 1 Level 2 Level 3 Total
£m £m £m £m
Financial assets
Investments at fair value through profit or loss - - 3,790 3,790
Trade and other receivables - 1 - 1
Derivative financial instruments - 82 - 82
- 83 3,790 3,873
Financial liabilities
Derivative financial instruments - (5) - (5)
- (5) - (5)
As at 31 March 2024
Level 1 Level 2 Level 3 Total
£m £m £m £m
Financial assets
Investments at fair value through profit or loss - - 3,842 3,842
Trade and other receivables - 1 - 1
Derivative financial instruments - 82 - 82
- 83 3,842 3,925
Financial liabilities
Derivative financial instruments - (5) - (5)
- (5) - (5)
Reconciliation of financial instruments categorised within Level 3 of fair
value hierarchy
As at 31 March
2025 2024
Level 3 fair value reconciliation £m £m
Opening fair value 3,842 3,641
Additions 213 256
Disposal proceeds and repayment (459) (224)
Movement in accrued income 12 (11)
Fair value movement (including exchange movements) 182 180
Closing fair value 3,790 3,842
The fair value movement (including exchange movements) is equal to the Net
gains on investments shown in the Statement of comprehensive income. This
includes an amount of £28 million relating to Valorem which was sold during
the year. The remaining amount of £154 million is unrealised movements on
investments and foreign exchange movements and is attributable to investments
held at the end of the year.
The holding period of the investments in the portfolio is expected to be
greater than one year. Therefore, investments are classified as non-current
unless there is an agreement to dispose of the investment within one year and
all relevant regulatory or other third-party approvals have been received. It
is not possible to identify with certainty whether any investments may be sold
within one year.
Investment income of £203 million (2024: £193 million) comprises dividend
income of £7 million (2024: £9 million) and interest of £196 million (2024:
£184 million).
Unquoted investments
The Company invests in private companies which are not quoted on an active
market. These are measured in accordance with the IPEV guidelines with
reference to the most appropriate information available at the time of
measurement. Further information regarding the valuation of unquoted
investments can be found in the Summary of portfolio valuation methodology
section.
The Company's policy is to fair value both the equity and shareholder debt
investments in infrastructure assets together where they will be managed and
valued as a single investment, were invested at the same time and cannot be
realised separately. The Directors consider that equity and debt share the
same characteristics and risks and they are therefore treated as a single unit
of account for valuation purposes and a single class for disclosure purposes.
As at 31 March 2025, the fair value of unquoted investments was £3,790
million (2024: £3,842 million). Individual portfolio asset valuations are
shown in the Portfolio summary.
The fair value of the investments is sensitive to changes in the macroeconomic
assumptions used as part of the portfolio valuation process. As part of its
analysis, the Board has considered the potential impact of a change in a
number of the macroeconomic assumptions used in the valuation process. By
considering these potential scenarios, the Board is well-positioned to assess
how the Company is likely to perform if affected by variables and events that
are inherently outside of the control of the Board and the Investment Manager.
The majority of the assets held within Level 3 are valued on a discounted cash
flow basis, hence the valuations are sensitive to the discount rate assumed in
the valuation of each asset. Other significant unobservable inputs include the
inflation rate assumptions, the interest rate assumptions used to project the
future cash flows, and the forecast cash flows themselves. The sensitivity to
the inflation rate and interest rates is described below, and the sensitivity
to the forecast cash flows is captured in the Market risk section in Note 9.
A discussion of discount rates applied can be found in the Summary of
portfolio valuation methodology section. Increasing the discount rate used in
the valuation of each asset by 1% would reduce the value of the portfolio by
£343 million (2024: £352 million). Decreasing the discount rate used in the
valuation of each asset by 1% would increase the value of the portfolio by
£391 million (2024: £404 million).
The majority of assets held within Level 3 have revenues that are linked,
partially linked or in some way correlated to inflation. The long-term CPI
inflation rate assumption across all jurisdictions is 2.0% (2024: 2.0%). The
long-term RPI assumption for the UK is 2.5% (2024: 2.5%). The impact of
increasing the short-term inflation rate assumption by 1% for the next two
years would increase the value of the portfolio by £47 million (2024: £54
million). Decreasing the inflation rate assumption used in the valuation of
each asset by 1% for the next two years would decrease the value of the
portfolio by £48 million (2024: £56 million). The timing and quantum of
price increases will vary across the portfolio and the sensitivity may differ
from that modelled. Changing the inflation rate assumption may result in
consequential changes to other assumptions used in the valuation of each
asset.
The valuations are sensitive to changes in interest rates, which may result
from: (i) unhedged existing borrowings within portfolio companies; (ii)
interest rates on uncommitted future borrowings assumed within the asset
valuations; and (iii) cash deposits held by portfolio companies. These
comprise a wide range of interest rates from short-term deposit rates to
longer-term borrowing rates across a broad range of debt products. Increasing
the cost of borrowing assumption for unhedged borrowings and any future
uncommitted borrowing and the cash deposit rates used in the valuation of each
asset by 1% would reduce the value of the portfolio by £192 million (2024:
£220 million). Decreasing the interest rate assumption for unhedged
borrowings used in the valuation of each asset by 1% would increase the value
of the portfolio by £190 million (2024: £214 million). This calculation does
not take account of any offsetting variances which may be expected to prevail
if interest rates changed, including the impact of inflation discussed above.
Over-the-counter derivatives
The Company uses over-the-counter foreign currency derivatives to hedge
foreign currency movements. The derivatives are held at fair value which
represents the price that would be received to sell or transfer the
instruments at the balance sheet date. The valuation technique incorporates
various inputs, including foreign exchange spot and forward rates, and uses
present value calculations. For these financial instruments, significant
inputs into models are market observable and are included within Level 2.
Valuation process for Level 3 valuations
The valuations on the Balance sheet are the responsibility of the Board of
Directors of the Company. The Investment Manager provides a valuation of
unquoted investments, debt and unlisted funds held by the Company on a
half-yearly basis. This is performed by the valuation team of the Investment
Manager and reviewed by the valuation committee of the Investment Manager. The
valuations are also subject to quality assurance procedures performed within
the valuation team. The valuation team verifies the major inputs applied in
the latest valuation by agreeing the information in the valuation computation
to relevant documents and market information. The valuation committee of the
Investment Manager considers the appropriateness of the valuation methods and
inputs, and may request that alternative valuation methods are applied to
support the valuation arising from the method chosen. On a half-yearly basis,
the Investment Manager presents the valuations to the Board. This includes a
discussion of the major assumptions used in the valuations, with an emphasis
on the more significant investments and investments with significant fair
value changes. Any changes in valuation methods are discussed and agreed with
the Audit and Risk Committee before the valuations on the Balance sheet are
approved by the Board.
8 Trade and other receivables
As at 31 March
2025 2024
£m £m
Current assets
Other receivables 1 1
Capitalised finance costs 1 2
2 3
9 Financial risk management
A full review of the Company's objectives, policies and processes for managing
and monitoring risk is set out in the Risk report. This Note provides further
detail on financial risk management, cross-referring to the Risk report where
applicable and providing further quantitative data on specific financial
risks.
Each investment made by the Company is subject to a full risk assessment
through a consistent investment approval process. The Board's Management
Engagement Committee, Audit and Risk Committee and the Investment Manager's
investment process are part of the overall risk management framework of the
Company.
The funding objective of the Company is that each category of investment ought
to be broadly matched with liabilities and shareholders' funds according to
the risk and maturity characteristics of the assets, and that funding needs
are to be met ahead of planned investment.
Capital structure
The Company has a continuing commitment to capital efficiency. The capital
structure of the Company consists of cash held on deposit and in AAA-rated
money market funds, borrowing facilities and shareholders' equity. The
Company's Articles require its outstanding borrowings, including any financial
guarantees to support subsequent obligations, to be limited to 50% of the
gross assets of the Company. The type and maturity of the Company's borrowings
are analysed in Note 11 and the Company's equity is analysed into its various
components in the Statement of changes in equity. Capital is managed so as to
maximise the return to shareholders, while maintaining a strong capital base
that ensures that the Company can operate effectively in the marketplace and
sustain future development of the business. The Board is responsible for
regularly monitoring capital requirements to ensure that the Company is
maintaining sufficient capital to meet its future investment needs.
The Company is regulated by the Jersey Financial Services Commission under the
provisions of the Collective Investment Funds (Jersey) Law 1988 as a listed
closed-ended collective investment fund and is not required as a result of
such regulation to maintain a minimum level of capital.
Capital is allocated for investment in infrastructure across the UK and
continental Europe. As set out in the Company's Investment policy, the maximum
exposure to any one investment is 25% of gross assets (including cash
holdings) at the time of investment.
Credit risk
The Company is subject to credit risk on the debt component of its unquoted
investments, cash, deposits, derivative contracts and receivables. The maximum
exposure to credit risk as a result of counterparty default equates to the
current carrying value of these financial assets. Throughout the year and the
prior year, the Company's cash and deposits were held in AAA-rated money
market funds. The counterparties selected for the derivative financial
instruments were all banks with a minimum of a BBB+ credit rating with at
least one major rating agency.
The credit quality of unquoted investments, which are held at fair value and
include debt and equity elements, is based on the financial performance of the
individual portfolio companies. The credit risk relating to these assets is
based on their enterprise value and is reflected through fair value movements.
This incorporates the impact from macroeconomic factors such as inflation,
interest rate rises and energy prices. The performance of underlying
investments is monitored by the Board to assess future recoverability.
For those assets and income entitlements that are not past due, it is believed
that the risk of default is small and capital repayments and interest payments
will be made in accordance with the agreed terms and conditions of the
investment. If the portfolio company has failed and there is no expectation to
recover any residual value from the investment, the Company's policy is to
record an impairment for the full amount of the loan. When the net present
value of the future cash flows predicted to arise from the asset, discounted
using the effective interest rate method, implies non-recovery of all or part
of the Company's investment, a fair value movement is recorded equal to the
valuation shortfall.
As at 31 March 2025, the Company had no loans or receivables or debt
investments considered past due (2024: nil).
The Company actively manages counterparty risk. Counterparty limits are set
and closely monitored by the Board and a regular review of counterparties is
undertaken by the Investment Manager and reported to the Board. As at 31 March
2025, the Company did not consider itself to have a significant exposure to
any one counterparty and held deposits and derivative contracts with a number
of different counterparties to reduce counterparty risk (2024: same).
Due to the size and nature of the investment portfolio, there is the potential
for concentration risk. This risk is managed by diversifying the portfolio by
sector and geography.
Liquidity risk
Further information on how liquidity risk is managed is provided in the Risk
report. The table below analyses the maturity of the Company's contractual
liabilities.
As at 31 March 2025
Payable Due within Due between Due between
on demand 1 year 1 and 2 years 2 and 5 years Total
£m £m £m £m £m
Liabilities
Loans and borrowings¹ - (13) (268) - (281)
Trade and other payables (1) (30) (14) (6) (51)
Derivative contracts - (2) (1) (2) (5)
Total undiscounted financial liabilities (1) (45) (283) (8) (337)
1 Loans and borrowings include undrawn commitment fees and interest payable on
the RCF referred to in Note 11. The maturity date of the RCF for the purposes
of this disclosure is 3 November 2026, which was the position at the balance
sheet date. The RCF was refinanced on 30 April 2025 with a maturity date in
June 2028.
As at 31 March 2024
Payable Due within Due between Due between
on demand 1 year 1 and 2 years 2 and 5 years Total
£m £m £m £m £m
Liabilities
Loans and borrowings¹ - (29) (29) (528) (586)
Trade and other payables (1) (42) (23) (9) (75)
Derivative contracts - - - (5) (5)
Total undiscounted financial liabilities (1) (71) (52) (542) (666)
1 Loans and borrowings include undrawn commitment fees and interest payable on
the RCF referred to in Note 11.
The derivative contracts liability shown is the net cash flow expected to be
paid on settlement. In order to manage the contractual liquidity risk, the
Company has free cash and debt facilities in place.
Market risk
The valuation of the Company's investment portfolio is largely dependent on
the underlying trading performance of the companies within the portfolio, but
the valuation of the portfolio and the carrying value of other items in the
Financial statements can also be affected by interest rate, currency and
market price fluctuations. The Company's sensitivities to these fluctuations
are set out below.
(i) Interest rate risk
Further information on how interest rate risk is managed is provided in the
Risk report.
An increase of 100 basis points in interest rates over 12 months (2024: 100
basis points) would lead to an approximate decrease in net assets and net
profit of the Company of £3 million (2024: £5 million). This exposure
relates principally to changes in interest payable on the drawn RCF balance at
the year end. The daily average cash balance of the Company, which is more
representative of the cash balance during the year, was £18 million (2024:
£25 million) and the weighted-average interest earned was 3.9% (2024: 4.6%).
In addition, the Company has indirect exposure to interest rates through
changes to the financial performance of portfolio companies caused by interest
rate fluctuations as disclosed in Note 7. This risk is considered a component
of market risk described in section (iii). The Company does not hold any fixed
rate debt investments or borrowings and is therefore not exposed to fair value
interest rate risk.
(ii) Currency risk
Further information on how currency risk is managed is provided in the Risk
report. The currency denominations of the Company's net assets are shown in
the table below. The sensitivity analysis demonstrates the exposure of the
Company's net assets to movements in foreign currency exchange rates. The
hedging strategy is discussed in the Financial review.
As at 31 March 2025
GBP(1) EUR NOK DKK USD SGD(2) Total
£m £m £m £m £m £m £m
Net assets 747 1,247 397 584 404 183 3,562
Sensitivity analysis
Assuming a 10% appreciation in sterling against the euro, Norwegian krona,
Danish krona, US dollar and Singapore dollar exchange rates:
Impact of exchange movements on net profit and net assets 178 (114) (36) (53) (36) (17) (78)
1 Sterling impact relates to the impact of fair value movement in derivatives
held by the Company to hedge foreign currency fluctuations in the valuation of
the investment portfolio. The notional amount of the derivatives is disclosed
in Note 10.
2 Following a restructure of Oystercatcher, the currency denomination of the
holding company for the investment in Advario Singapore Limited changed from
EUR to SGD during the year.
As at 31 March 2024
GBP(1) EUR NOK DKK USD Total
£m £m £m £m £m £m
Net assets 693 1,408 346 539 356 3,342
Sensitivity analysis
Assuming a 10% appreciation in sterling against the euro, Norwegian krona,
Danish krona and US dollar exchange rates:
Impact of exchange movements on net profit and net assets 104 (128) (31) (49) (32) (136)
1 Sterling impact relates to the impact of fair value movement in derivatives
held by the Company to hedge foreign currency fluctuations in the valuation of
the investment portfolio. The notional amount of the derivatives is disclosed
in Note 10.
The impact of an equivalent depreciation in sterling against the EUR, NOK,
DKK, USD and SGD exchange rates has the inverse impact on net profit and net
assets from that shown above. The risk exposure at the year end is considered
to be representative of this year as a whole.
(iii) Market risk
Further information about the management of external market risk and its
impact on price or valuation, which arises principally from unquoted
investments, is provided in the Risk report. A 10% increase in the fair value
of those investments would have the following direct impact on net profit and
net assets. The impact of a change in all cash flows has an equivalent impact
on the fair value, as set out below.
2025 2024
Year to 31 March £m £m
Increase in net profit and net assets 379 384
The impact of a 10% decrease in the fair value of those investments would have
the inverse impact on net profit and net assets from that shown above. The
risk exposure at the year end is considered to be representative of this year
as a whole.
By the nature of the Company's activities, it has large exposures to
individual assets that are susceptible to movements in price. This risk
concentration is managed within the Company's investment strategy, as
discussed in the Risk report.
(iv) Fair values
The fair value of the investment portfolio is described in detail in the
Summary of portfolio valuation methodology section and in Note 7. The fair
values of the remaining financial assets and liabilities approximate to their
carrying values (2024: same).
The sensitivity analysis in respect of the interest rate, currency and market
price risks is considered to be representative of the Company's exposure to
financial risks throughout the period to which they relate (2024: same).
10 Derivative financial instruments
As at 31 March
2025 2024
£m £m
Non-current assets
Foreign exchange forward contracts 33 49
Current assets
Foreign exchange forward contracts 49 33
Non-current liabilities
Foreign exchange forward contracts (3) -
Current liabilities
Foreign exchange forward contracts (2) (5)
Foreign exchange forward contracts
The Company uses foreign exchange forward contracts to minimise the effect of
fluctuations in the investment portfolio from movements in exchange rates, and
also to fix the value of certain expected future cash flows arising from
distributions made by investee companies.
The fair value of these contracts is recorded in the Balance sheet. No
contracts are designated as hedging instruments and consequently all changes
in fair value are taken through profit or loss.
As at 31 March 2025, the notional amount of the forward foreign exchange
contracts held by the Company was £1,956 million (2024: £1,814 million).
11 Loans and borrowings
The Company had a £900 million RCF at 31 March 2025. In April 2025, the £900
million RCF was refinanced with improved terms and now matures in June 2028.
The RCF is secured by a floating charge over the bank accounts of the Company.
Interest is payable at SONIA or EURIBOR plus a fixed margin on the drawn
amount. This fixed margin is subject to a small adjustment annually based upon
performance against agreed sustainability metrics. As at 31 March 2025, the
Company had £260 million of drawings under the RCF (2024: £510 million). The
RCF has one financial covenant: a loan-to-value ratio.
The changes in the Company's liabilities arising from financing activities are
shown in the table below.
As at 31 March
2025 2024
£m £m
Opening liability 510 501
Additions 239 402
Repayments (476) (379)
Exchange movements (13) (14)
Closing liability 260 510
12 Trade and other payables
As at 31 March
2025 2024
£m £m
Non-current liabilities
Performance fee 20 32
Current liabilities
Management and performance fees 30 42
Accruals and other creditors 1 1
51 75
The carrying value of all liabilities is representative of fair value (2024:
same).
13 Issued capital
As at 31 March 2025 As at 31 March 2024
Number £m Number £m
Authorised, issued and fully paid
Opening balance 922,350,000 1,598 922,350,000 1,598
Closing balance 922,350,000 1,598 922,350,000 1,598
Reconciliation to Stated capital account
As at 31 March 2025 As at 31 March 2024
£m £m
Proceeds from issue of ordinary shares 1,598 1,598
Transfer to retained reserves on 20 December 2007 (693) (693)
Cost of issue of ordinary shares (26) (26)
Stated capital account closing balance 879 879
As at 31 March 2025, the residual value on the Stated capital account was
£879 million (2024: £879 million).
14 Per share information
The earnings and net asset value per share attributable to the equity holders
of the Company are based on the following data:
Year to 31 March 2025 2024
Earnings per share (pence)
Basic and diluted 36.1 37.6
Earnings (£m)
Profit after tax for the year 333 347
Number of shares (million)
Weighted average number of shares in issue 922.4 922.4
Number of shares at the end of the year 922.4 922.4
As at 31 March
2025 2024
Net asset value per share (pence)
Basic and diluted 386.2 362.3
Net assets (£m)
Net assets 3,562 3,342
15 Dividends
Declared and paid during the year Year to 31 March 2025 Year to 31 March 2024
Pence per share Pence per
£m share £m
Interim dividend paid on ordinary shares 6.325 58 5.950 55
Prior year final dividend paid on ordinary shares 5.950 55 5.575 51
12.275 113 11.525 106
The Company proposes paying a final dividend of 6.325 pence per share (2024:
5.95 pence) which will be payable to those shareholders that are on the
register on 13 June 2025. On the basis of the shares in issue at year end,
this would equate to a total final dividend of £58 million (2024: £55
million).
The final dividend is subject to approval by shareholders at the AGM in July
2025 and has therefore not been accrued in these Financial statements.
16 Commitments
As at 31 March 2025, the Company had no commitments (2024: nil).
17 Contingent liabilities
As at 31 March 2025, the Company had no contingent liabilities (2024: nil).
18 Related parties
Transactions between 3i Infrastructure and 3i Group
3i Group holds 29.2% (2024: 29.2%) of the ordinary shares of the Company. This
classifies 3i Group as a 'substantial shareholder' of the Company as defined
by the UK Listing Rules. During the year, 3i Group received dividends of £33
million (2024: £31 million) from the Company.
3i Investments plc, a subsidiary of 3i Group, is the Company's Alternative
Investment Fund Manager and provides its services under an Investment
Management Agreement ('IMA'). 3i plc, another subsidiary of 3i Group, together
with 3i Investments plc, provides support services to the Company (which are
ancillary and related to the investment management service), which it is doing
pursuant to the terms of the IMA.
Fees under the IMA consist of a tiered management fee and time weighting of
the management fee calculation and a one-off transaction fee of 1.2% payable
in respect of new investments. The applicable tiered rates are shown in the
table below. The management fee is payable quarterly in advance.
Gross investment value Applicable tier rate
Up to £1.25bn 1.4%
£1.25bn to £2.25bn 1.3%
Above £2.25bn 1.2%
For the year to 31 March 2025, £49 million (2024: £49 million) was payable,
including one-off transaction fees payable in respect of new investments, and
advance payments of £50 million were made, resulting in an amount due from 3i
plc of £1 million (2024: nil). In consideration of the provision of support
services under the IMA, the Company pays the Investment Manager an annual
fixed fee. The cost for the support services incurred for the year to 31 March
2025 was £1 million (2024: £1 million). There was no outstanding balance
payable as at 31 March 2025 (2024: nil).
Under the IMA, a performance fee is payable to the Investment Manager equal to
20% of the Company's total return in excess of 8%, payable in three equal
annual instalments. The second and third instalments will only be payable if
either (a) the Company's performance in the year in which that instalment is
paid also triggers payment of a performance fee in respect of that year, or
(b) if the Company's performance over the three years, starting with the year
in which the performance fee is earned, exceeds the 8% hurdle on an annual
basis. There is no high water mark requirement.
The performance hurdle requirement was exceeded for the year to 31 March 2025
and therefore a performance fee of £18 million was recognised (2024: £26
million). The outstanding balance payable as at 31 March 2025 was £50 million
(2024: £74 million), which includes the second and third instalments of the
FY24 fee and the third instalment of the FY23 fee.
Year Performance Outstanding balance at 31 March Payable in FY26
fee £m £m
£m
FY25 18 18 6
FY24 26 17 9
FY23 45 15 15
Under the IMA, the Investment Manager's appointment may be terminated by
either the Company or the Investment Manager giving the other not less than 12
months' notice in writing, or by giving the other six months' notice in
writing if the Investment Manager has ceased to be a member of 3i Group, or
with immediate effect by either party giving the other written notice in the
event of insolvency or material or persistent breach by the other party. The
Investment Manager may also terminate the agreement on two months' notice
given within six months of a change of control of the Company.
Regulatory information relating to fees
3i Investments plc acts as the AIFM to the Company. In performing the
activities and functions of the AIFM, the AIFM or another 3i company may pay
or receive fees, commissions or non-monetary benefits to or from third parties
of the following nature:
• payments for third-party services: The Company may retain the
services of third-party consultants; typically this is for an independent
director or other investment management specialist expertise. The amount paid
varies in accordance with the nature of the service and the length of the
service period and is usually, but not always, paid or reimbursed by the
portfolio companies. The payment may involve a flat fee, retainer or success
fee. Such payments, where borne by the Company, are included within Operating
expenses. In some circumstances, the AIFM may retain the services of
third-party consultants which are paid for by the AIFM and not recharged to
the Company; and
• payments for services from 3i companies: Other 3i companies may
provide investment advisory and other services to the AIFM or other 3i
companies and receive payment for such service.
19 Unconsolidated subsidiaries and related undertakings
Name Place of incorporation and operation Ownership interest
Investment holding companies:
3i Tampnet Holdings Limited UK 100%
3iN Attero Holdco Limited UK 100%
3i Amalthea Topco Limited UK 100%
3i Green Gas Limited Jersey 100%
3i Envol Limited Jersey 72%
3i Oystercatcher Holdco Limited UK 100%
Oystercatcher Holdings Limited UK 100%
Oystercatcher Holdco Limited UK 100%
Oystercatcher Luxco 1 S.à r.l. Luxembourg 100%
Oystercatcher Luxco 2 S.à r.l. Luxembourg 100%
3i India Infrastructure Fund A LP UK 100%
DNS:NET Group:
DNS Holdings GmbH Germany 64%
DNS Bidco GmbH Germany 64%
DNS:NET Internet Service GmbH Germany 64%
Antennen-Schulze GmbH Germany 64%
ESVAGT Group:
ERRV Holdings ApS Denmark 83%
ERRV ApS Denmark 83%
ESVAGT A/S Denmark 83%
ESVAGT Holdings Inc USA 83%
ESVAGT Norge AS Norway 83%
ESVAGT Holdings Ltd UK 83%
ESVAGT UK Ltd UK 83%
Future Biogas Group:
Green Gas Holdco 1 Limited UK 77%
Green Gas Holdco 2 Limited UK 77%
Future Biogas Holdco Limited UK 72%
Future Biogas Midco Limited UK 72%
Future Biogas Bidco Limited UK 72%
Future Biogas Group Limited UK 72%
Future Biogas Limited UK 72%
Future Biogas Systems Limited UK 72%
Ironstone Energy Limited UK 72%
Moor Bio-Energy Limited UK 72%
Little Oak Biogas Limited UK 72%
Heath Farm Energy Limited UK 72%
Ridge Road Energy Limited UK 72%
Meridian Biogas Limited UK 72%
Riccall Renewables Limited UK 72%
Beckby Biogas Limited UK 72%
Bluestone Biogas Limited UK 72%
Carrstone Renewables Limited UK 72%
FLAG Group:
GCX Topco Limited UK 98%
GCX Midco Limited UK 98%
GCX Bidco Limited UK 98%
GCX Holdings Limited Bermuda 98%
GCX Global Limited Bermuda 98%
FLAG Telecom Limited Bermuda 98%
FLAG Telecom Asia Limited Hong Kong 98%
FLAG Telecom UK Limited UK 98%
GCX India Services Limited India 98%
FLAG Atlantic France SAS France 98%
FLAG Telecom Australia Pty Limited Australia 98%
FLAG Telecom Deutschland GmbH Germany 98%
FLAG Atlantic UK Limited UK 98%
FLAG Telecom Singapore Pte Limited Singapore 98%
GCXG India Private Limited India 98%
FLAG Telecom Taiwan Limited Taiwan 59%
FLAG Telecom Development Limited Bermuda 98%
FLAG Telecom Hellas AE Greece 98%
FLAG Telecom Development Services Company LLC Egypt 98%
FLAG Telecom Network Services DAC Ireland 98%
FLAG Telecom Ireland DAC Ireland 98%
FLAG Telecom Ireland Network DAC Ireland 98%
FLAG Telecom Network USA Limited USA 98%
FLAG Telecom España Network SAU Spain 98%
FLAG Telecom Japan Limited Japan 98%
GCX Managed Services Limited Bermuda 98%
Vanco Group Limited UK 98%
Vanco UK Limited UK 98%
Vanco Global Limited UK 98%
Vanco International Limited UK 98%
Vanco ROW Limited UK 98%
Vanco GmbH Germany 98%
Vanco SAS France 98%
Vanco (Asia Pacific) Pte Limited Singapore 98%
Vanco SpZoo Poland 98%
Euronet Spain SA Spain 98%
Vanco Switzerland A.G. Switzerland 98%
Vanco Sweden AB Sweden 98%
Vanco Srl Italy 98%
Net Direct SA (Proprietary) Limited South Africa 98%
Vanco (Shanghai) Co. Ltd China 98%
Vanco Japan KK Japan 98%
Vanco South America Ltda Brazil 98%
Vanco India Ops Private Limited India 98%
Vanco Australasia Pty Limited Australia 98%
Vanco BV The Netherlands 98%
Vanco Deutschland GmbH Germany 98%
VNO Direct Limited UK 98%
Vanco US, LLC USA 98%
Vanco Solutions Inc. USA 98%
Yipes Holdings, Inc. USA 98%
Reliance Globalcom Services Inc. USA 98%
YTV Inc. USA 98%
Infinis Group:
Infinis Energy Group Holdings Limited UK 100%
Infinis Energy Management Limited UK 100%
Infinis Limited UK 100%
Infinis (Re-Gen) Limited UK 100%
Novera Energy (Holdings 2) Limited UK 100%
Novera Energy Generation No. 1 Limited UK 100%
Novera Energy Operating Services Limited UK 100%
Gengas Limited UK 100%
Novera Energy Generation No. 2 Limited UK 100%
Costessey Energy Limited UK 100%
Infinis Alternative Energies Limited UK 100%
Infinis Energy Services Limited UK 100%
Infinis Energy Storage Limited UK 100%
Infinis (Shoreside) Limited UK 100%
Balbougie Energy Centre II Limited UK 100%
Infinis (Peel Road) Energy Storage Limited UK 100%
Barbican Holdco Limited UK 100%
Barbican Bidco Limited UK 100%
Alkane Energy Limited UK 100%
Alkane Energy UK Limited UK 100%
Seven Star Natural Gas Limited UK 100%
Regent Park Energy Limited UK 100%
Leven Power Limited UK 100%
Rhymney Power Limited UK 100%
Alkane Energy CM Holdings Limited UK 100%
Alkane Energy CM Limited UK 100%
Infinis Solar Holdings Limited UK 100%
Infinis Solar Developments Limited UK 100%
Durham Solar 1 Limited UK 100%
Infinis Solar Limited UK 100%
Aura Power Solar UK6 Limited UK 100%
Infinis (California) Limited UK 100%
Infinis (Oaklands) Limited UK 100%
Infinis (Ford Oaks) Limited UK 100%
Ionisos Group:
Epione Holdco SAS France 96%
Epione Bidco SAS France 96%
Ionisos Mutual Services SAS France 96%
Ionisos SAS France 96%
Ionisos GmbH Germany 96%
Ionisos Baltics OÜ Estonia 96%
EBD Irradiation Services AG Switzerland 96%
Joulz Group:
Joulz Holdco B.V. The Netherlands 99%
Joulz Manco B.V. The Netherlands 77%
Joulz Bidco B.V. The Netherlands 99%
Joulz B.V. The Netherlands 99%
Joulz Meetbedrijf B.V. The Netherlands 99%
Joulz Infradiensten B.V. The Netherlands 99%
Joulz Laadoplossingen B.V. The Netherlands 99%
Joulz Zonne-energie B.V. The Netherlands 99%
Joulz Zonne-energie Beheer B.V. The Netherlands 99%
Dutch Durables Energy 2 B.V. The Netherlands 99%
Dutch Durables Energy 5 B.V. The Netherlands 99%
Dutch Durables Energy 6 B.V. The Netherlands 99%
SRL Group:
Amalthea Holdco Limited UK 92%
Amalthea Midco Limited UK 92%
Amalthea Bidco Limited UK 92%
Jupiter Bidco Limited UK 92%
SRL Traffic Systems Limited UK 92%
SRL GmbH Germany 92%
SRL Traffic Systems Limited Ireland 92%
TCR Group:
Envol Holdings Limited Jersey 71%
Envol Midco Limited UK 71%
Envol Investments Limited UK 71%
TCR Group Shared Services SDN, BHD. Malaysia 71%
TCR New Zealand New Zealand 71%
TCR APAC (Singapore) Pte Limited Singapore 71%
TCR Ground Support Equipment Canada Inc. Canada 71%
DCL Aviation Group Inc. Canada 71%
TCR GSE Singapore Pte Limited Singapore 71%
TCR AD LLC UAE 71%
TCR Middle East LLC Saudi Arabia 71%
TCR CapVest S.A. Belgium 71%
TCR GSE Australia PLY Limited Australia 71%
EEM Solution PLY Limited Australia 71%
Adaptalift GSE Pty Limited Australia 71%
Adaptalift GSE Singapore Pte Limited Singapore 71%
TCR Solution SDN, BHD. Malaysia 71%
TCR International USA, Inc. USA 71%
TCR Americas LLC USA 71%
TCR International N.V. Belgium 71%
KES B.V. The Netherlands 71%
Trailer Construction & Repairing Netherland (TCR) B.V. The Netherlands 71%
TCR Belgium N.V. Belgium 71%
TCR France SAS France 71%
Aerobatterie SAS France 71%
Aerolima IMMS S.à r.l. Luxembourg 71%
Aerolima Ingénierie SAS France 71%
TCR UK Limited UK 71%
Technical Maintenance Solutions UK Limited UK 71%
TCR-GmbH Trailer, Construction, Repairing and Equipment Rental Germany 71%
Trailer Construction & Repairing Ireland Limited Ireland 71%
TCR Italia S.p.A. Italy 71%
TCR Norway AS Norway 71%
TCR Sweden AB Sweden 71%
TCR Denmark ApS Denmark 71%
TCR Finland OY Finland 71%
Trailer Construction and Repairing Iberica S.A.U. Spain 71%
Dormant entities:
3i Osprey LP UK 69%
The list above comprises the unconsolidated subsidiary undertakings of the
Company as at 31 March 2025.
There are no current commitments or intentions to provide financial or other
support to any of the unconsolidated subsidiaries, including commitments or
intentions to assist the subsidiaries in obtaining financial support, except
for those disclosed in Note 16 (2024: none). No such financial or other
support was provided during the year (2024: none).
Investment policy (unaudited)
The Company aims to build a diversified portfolio of equity investments in
entities owning infrastructure businesses and assets. The Company seeks
investment opportunities globally, but with a focus on Europe, North America
and Asia.
The Company's equity investments will often comprise share capital and related
shareholder loans (or other financial instruments that are not shares but
that, in combination with shares, are similar in substance). The Company may
also invest in junior or mezzanine debt in infrastructure businesses or
assets.
Most of the Company's investments are in unquoted companies. However, the
Company may also invest in entities owning infrastructure businesses and
assets whose shares or other instruments are listed on any stock exchange,
irrespective of whether they cease to be listed after completion of the
investment, if the Directors judge that such an investment is consistent with
the Company's investment objectives.
The Company will, in any case, invest no more than 15% of its total gross
assets in other investment companies or investment trusts which are listed on
the Official List.
The Company may also consider investing in other fund structures (in the event
that it considers, on receipt of advice from the Investment Manager, that that
is the most appropriate and effective means of investing), which may be
advised or managed either by the Investment Manager or a third party. If the
Company invests in another fund advised or managed by 3i Group, the relevant
proportion of any advisory or management fees payable by the investee fund to
3i plc will be deducted from the annual management fee payable under the
Investment Management Agreement and the relevant proportion of any performance
fee will be deducted from the annual performance fee, if payable, under the
Investment Management Agreement.
For the avoidance of doubt, there will be no similar set-off arrangement where
any such fund is advised or managed by a third party.
For most investments, the Company seeks to obtain representation on the Board
of Directors of the investee company (or equivalent governing body) and in
cases where it acquires a majority equity interest in a business, that
interest may also be a controlling interest.
No investment made by the Company will represent more than 25% of the
Company's gross assets, including cash holdings, at the time of making the
investment. It is expected that most individual investments will exceed £50
million. In some cases, the total amount required for an individual
transaction may exceed the maximum amount that the Company is permitted to
commit to a single investment. In such circumstances, the Company may consider
entering into co-investment arrangements with 3i Group (or other investors who
may also be significant shareholders), pursuant to which 3i Group and its
subsidiaries (or such other investors) may co-invest on the same financial and
economic terms as the Company. The suitability of any such co-investment
arrangements will be assessed on a transaction-by-transaction basis.
Depending on the size of the relevant investment and the identity of the
relevant co-investor, such a co-investment arrangement may be subject to the
related party transaction provisions contained in the UK Listing Rules and may
therefore require shareholder consent.
The Company's Articles require its outstanding borrowings, including any
financial guarantees to support subsequent obligations, to be limited to 50%
of the gross assets of the Company (valuing investments on the basis included
in the Company's accounts).
In accordance with UK Listing Rules requirements, the Company will only make a
material change to its Investment policy with the approval of shareholders.
Statement of Directors' responsibilities
In accordance with the FCA's Disclosure Guidance and Transparency Rules, the
Directors confirm to the best of their knowledge that:
a) the Financial statements, prepared in accordance with applicable
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company taken as a whole; and
b) the Annual report and accounts includes a fair review of the development
and performance of the business and the position of the Company taken as a
whole, together with a description of the principal risks and uncertainties
faced by the Company.
The Directors of the Company and their functions are listed below. The
Directors have acknowledged their responsibilities in relation to the
Financial statements for the year to 31 March 2025.
Richard Laing
Chair
7 May 2025
Board of Directors and their functions
Richard Laing, Non-executive Chair, and Chair of the Nomination, Disclosure,
and Management Engagement Committees.
Stephanie Hazell, Senior Independent Director, and Chair of the Remuneration
Committee.
Martin Magee, Independent non-executive Director, and Chair of the Audit and
Risk Committee.
Doug Bannister, Independent non-executive Director.
Milton Fernandes, Independent non-executive Director.
Lisa Gordon, Independent non-executive Director.
Jennifer Dunstan, Non-executive Director.
Portfolio valuation methodology (unaudited)
A description of the methodology used to value the investment portfolio of the
Company is set out below in order to provide more detailed information than is
included within the accounting policies and the Investment Manager's review
for the valuation of the portfolio. The methodology complies in all material
aspects with the International Private Equity and Venture Capital valuation
guidelines which are endorsed by the British Private Equity and Venture
Capital Association and Invest Europe.
Basis of valuation
Investments are reported at the Directors' estimate of fair value at the
reporting date in compliance with IFRS 13 Fair Value Measurement. Fair value
is defined as 'the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date'.
General
In estimating fair value, the Directors seek to use a methodology that is
appropriate in light of the nature, facts and circumstances of the investment
and its materiality in the context of the overall portfolio. The methodology
that is the most appropriate may consequently include adjustments based on
informed and experience-based judgements, and will also consider the nature of
the industry and market practice. Methodologies are applied consistently from
period to period, except where a change would result in a better estimation of
fair value. Given the uncertainties inherent in estimating fair value, a
degree of caution is applied in exercising judgements and making necessary
estimates.
Investments may include portfolio assets and other net assets/liabilities
balances. The methodology for valuing portfolio assets is set out below. Any
net assets/liabilities within intermediate holding companies are valued in
line with the Company accounting policy and held at fair value or approximate
to fair value.
Quoted investments
Quoted equity investments are valued at the closing bid price at the reporting
date. In accordance with International Financial Reporting Standards, no
discount is applied for liquidity of the stock or any dealing restrictions.
Quoted debt investments will be valued using quoted prices provided by
third-party broker information where reliable or will be held at cost less
fair value adjustments.
Unquoted investments
Unquoted investments are valued using one of the following methodologies:
• Discounted Cash Flow ('DCF');
• Proportionate share of net assets;
• Sales basis; and
• Cost less any fair value adjustments required.
DCF
DCF is the primary basis for valuation. In using the DCF basis, fair value is
estimated by deriving the present value of the investment using reasonable
assumptions and estimation of expected future cash flows, including contracted
and uncontracted revenues, expenses, capital expenditure, financing and
taxation, and the terminal value and date, and the appropriate risk-adjusted
discount rate that quantifies the risk inherent to the investment. The
terminal value attributes a residual value to the investee company at the end
of the projected discrete cash flow period. The discount rate will be
estimated for each investment derived from the market risk-free rate, a
risk-adjusted premium and information specific to the investment or market
sector.
Proportionate share of net assets
Where the Company has made investments into other infrastructure funds, the
value of the investment will be derived from the Company's share of net assets
of the fund based on the most recent reliable financial information available
from the fund. Where the underlying investments within a fund are valued on a
DCF basis, the discount rate applied may be adjusted by the Company to reflect
its assessment of the most appropriate discount rate for the nature of assets
held in the fund. In measuring the fair value, the net asset value of the fund
is adjusted, as necessary, to reflect restrictions on redemptions, future
commitments, illiquid nature of the investments and other specific factors of
the fund.
Sales basis
The expected sale proceeds will be used to assign a fair value to an asset in
cases where offers have been received as part of an investment sales process.
This may either support the value derived from another methodology or may be
used as the primary valuation basis. A marketability discount is applied to
the expected sale proceeds to derive the valuation where appropriate.
Cost less fair value adjustment
Any investment in a company that has failed or, in the view of the Board, is
expected to fail within the next 12 months, has the equity shares valued at
nil and the fixed income shares and loan instruments valued at the lower of
cost and net recoverable amount.
Glossary
AI refers to artificial intelligence.
Alternative Investment Fund ('AIF') 3i Infrastructure plc is an AIF managed
by 3i Investments plc.
Alternative Investment Fund Manager ('AIFM') is the regulated manager of an
AIF. For 3i Infrastructure plc, this is 3i Investments plc.
AIFMD refers to the Alternative Investment Fund Managers Directive, a
regulatory framework which applies to the management of AIFs managed and
marketed in and into the EU.
Approved Investment Trust Company is a particular UK tax status maintained by
3i Infrastructure plc. An Approved Investment Trust Company is a UK tax
resident company which meets certain conditions set out in the UK tax rules,
which include a requirement for the company to undertake portfolio investment
activity that aims to spread investment risk and for the company's shares to
be listed on an approved exchange. The 'approved' status for an Investment
Trust must be agreed by the UK tax authorities and its benefit is that certain
profits of the company, principally its capital profits, are not taxable in
the UK.
Asset IRR refers to the internal rate of return of the existing and realised
portfolio since the inception of the Company. The asset IRR to 31 March 2025
is 18% (2024:18%). This calculation incorporates the cost of each investment,
cash income, proceeds on disposal, capital returns, valuation as at 31 March
2025, including accrued income and an allocation of foreign exchange hedging.
Association of Investment Companies ('AIC') is a UK trade body for
closed-ended investment companies.
Board is the Board of Directors of the Company.
Capex refers to capital expenditure which is money a company uses to acquire,
upgrade, and maintain physical assets such as property, plants, buildings,
technology, or equipment. Capex is often used to undertake new projects or
investments by a company which add some future economic benefit to the
operation.
Capital reserve recognises all profits that are capital in nature or have been
allocated to capital. These profits are distributable by way of a dividend.
Company refers to 3i Infrastructure plc.
CPI refers to the consumer price index and is measure of inflation
CSRD is the Corporate Sustainability Reporting Directive.
Discounting means the reduction in present value at a given date of a future
cash transaction at an assumed rate, using a discount factor reflecting the
time value of money.
EBITDA, or earnings before interest, taxes, depreciation and amortization, is
a measure of a company's financial performance
Edge data centres are strategically located facilities designed to bring data
storage and processing closer to end users.
EO refers to ethylene oxide, a method of sterilisation used by Ionisos.
ERRV is an Emergency Rescue and Response Vessel.
ESG refers to environmental, social and governance.
EV, or electric vehicle, is a vehicle that can be powered by an electric
motor.
External auditor refers to the independent auditor, Deloitte LLP.
Fair value through profit or loss ('FVTPL') is an IFRS measurement basis
permitted for assets and liabilities which meet certain criteria. Gains and
losses on assets and liabilities measured as FVTPL are recognised directly in
the Statement of comprehensive income.
FCA refers to the Financial Conduct Authority who regulate financial services
firms and financial markets in the UK.
FTTH refers to fibre-to-the-home. This describes the fibre-optic connection to
individual homes or buildings.
FY15, FY16, FY19, FY22, FY23, FY24, FY25, FY26, FY27, FY28, FY29, FY30,
FY31, FY32, FY33 refers to the financial years to 31 March 2015, 31 March
2016, 31 March 2019, 31 March 2022, 31 March 2023, 31 March 2024, 31 March
2025 31 March 2026, 31 March 2027, 31 March 2028, 31 March 2029, 31 March
2030, 31 March 2031, 31 March 2032 and 31 March 2033 respectively.
GAAP refers to generally accepted accounting principles.
GHG refers to greenhouse gases.
International Financial Reporting Standards ('IFRS') are accounting standards
issued by the International Accounting Standards Board ('IASB'). The Company's
Financial statements are required to be prepared in accordance with IFRS, as
adopted by the UK.
Initial Public Offering ('IPO') is the mechanism by which a company admits its
stock to trading on a public stock exchange. 3i Infrastructure plc completed
its IPO in March 2007.
Investment income is that portion of income that is directly related to the
return from individual investments and is recognised as it accrues. It is
comprised of dividend income, income from loans and receivables, and fee
income. It is recognised to the extent that it is probable that there will be
an economic benefit and the income can be reliably measured.
IRR refers to the internal rate of return and is a metric used to estimate the
profitability of investments.
Key Performance Indicator ('KPI') is a measure by reference to which the
development, performance or position of the Company can be measured
effectively.
Long-term sustainable returns are returns that can be sustained into the long
term.
M&A or mergers and acquisitions refers to the consolidation of companies
or their major assets through financial transactions between companies.
Money multiple is calculated as the cumulative distributions or realisation
proceeds plus any residual value divided by invested or paid-in capital.
Net annualised return is the annualised growth rate in NAV per share to 31
March 2025, including ordinary and special dividends paid. The net annualised
return since the inception of the Company to 31 March 2025 was 14% (2024:14%)
and since the change in strategy in FY16 to 31 March 2025 was 17% (2024:18%).
Net asset value ('NAV') is a measure of the fair value of all the Company's
assets less liabilities.
NAV per share is the NAV divided by the total number of shares in issue.
Net gains on investments is the movement in the fair value of investments
between the start and end of the accounting period, or investment disposal
date, or the investment acquisition date and the end of the accounting period,
including divestment-related costs where applicable, converted into sterling
using the exchange rates in force at the end of the period.
Ongoing charges A measure of the annual recurring operating costs of the
Company, expressed as a percentage of average NAV over the reporting period.
Public Private Partnership ('PPP') is a government service or private business
venture which is funded and operated through a partnership of government and
one or more private sector companies.
Retained reserves recognise the cumulative profits to 15 October 2018,
together with amounts transferred from the Stated capital account.
Revenue reserve recognises all profits that are revenue in nature or have been
allocated to revenue.
Revolving credit facility ('RCF') refers to the £900 million facility
provided by the Company's lenders.
RPI refers to the retail price index and is a measure of inflation.
SBTi refers to the Science Based Targets initiative, a corporate climate
action organisation.
SORP means the Statement of Recommended Practice: Financial Statements of
Investment Trust Companies and Venture Capital Trusts.
SOV is a service operation vessel.
Stated capital account The Stated capital account of the Company represents
the cumulative proceeds recognised from share issues or new equity issued on
the conversion of warrants made by the Company net of issue costs and reduced
by any amount that has been transferred to Retained reserves, in accordance
with Jersey Company Law, in previous years.
Sustainability KPIs Sustainability metrics in relation to the
sustainability-linked revolving credit facility. The facility includes targets
across ESG themes aligned with our purpose.
TCFD is the Task Force on Climate-related Financial Disclosures.
Total return measured as a percentage, is calculated against the opening NAV,
net of the final dividend for the previous year, and adjusted (on a
time-weighted average basis) to take into account any equity issued and
capital returned in the year.
Total Shareholder Return ('TSR') is the measure of the overall return to
shareholders and includes the movement in the share price and any dividends
paid, assuming that all dividends are reinvested on their ex-dividend date.
TWh refers to Terawatt hours and is a unit of energy representing one trillion
watt hours.
For further information see our website
www.3i-infrastructure.com
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. END FR FLFIAEFIDIIERecent news on 3i Infrastructure
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