REG - Sequoia Econ Infra - NAV and Investment Update

Sequoia Economic Infrastructure Income FundAnnouncement

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RNS Number : 0165R  Sequoia Economic Infra Inc Fd Ld  15 July 2025

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO
THE UNITED STATES

 

 

Sequoia Economic Infrastructure Income Fund Limited ("SEQI" or the "Company")

 

Monthly NAV and portfolio update - June 2025

 

 

The NAV per share for SEQI, the largest LSE listed infrastructure debt fund,
increased to 92.56 pence per share from the prior month's NAV per share of
91.79 pence, representing an increase of 0.77 pence per share.

 

                                        pence per share
 31 May NAV                             91.79
 Interest income, net of expenses*               0.52
 Asset valuations, net of FX movements           0.23
 Subscriptions / share buybacks                  0.02
 30 June NAV                                    92.56

 

 

No expected material FX gains or losses as the portfolio is approximately
100.1% currency-hedged. However, the Company's NAV may include unrealised
short-term FX gains or losses, driven by differences in the valuation
methodologies of its FX hedges and the underlying investments - such movements
will typically reverse over time.

 

Well positioned to benefit from high interest rates; 59.4% of portfolio is in
fixed rate investments as of June 2025.

 

Investor updates - Annual Report FY25

 

The Investment Adviser is pleased to announce that its Annual Report and
Sustainability Report for the year ended 31 March 2025 were both released on
25 June 2025.

 

Annual Report: Results Centre - Sequoia Economic Infrastructure Income Fund
Limited (https://www.seqi.fund/investors/results/)

 

Sustainability Report: Publications - Sequoia Economic Infrastructure Income
Fund Limited (https://www.seqi.fund/sustainability/publications/)

 

Market Summary

 

Tariff Impact & Geopolitical Analysis

 

 ·             On 7 July (after month-end), President Trump dispatched letters to key trading
               partners, including Japan and South Korea, announcing tariffs ranging from 25%
               to 40% effective 1 August. This move effectively extends the negotiation
               deadline from 9 July to 1 August.

 ·             The U.S. has also signalled a willingness to negotiate exemptions on a
               country-by-country basis. This emphasis on deal-making over blanket
               implementation has provided a degree of reassurance to markets, with cautious
               optimism for a more measured and negotiated trade environment.

 ·             Infrastructure is broadly recognised as a defensive asset class, typically
               exhibiting resilience during periods of market volatility. SEQI's portfolio is
               deliberately constructed to reflect this, with minimal exposure to more
               cyclical subsectors such as oil refining, aviation, and container ports. As of
               June 2025, 55.9% of the Company's investments are concentrated in
               traditionally defensive assets, including renewables, digital infrastructure,
               utilities, and accommodation.

 

 

 

 

*Capital movements includes an element of capitalised interest.

Interest Rate Announcements and Inflation Data

 

 ·             During June, The Federal Reserve held rates steady at 4.50% and is expected to
               begin easing policy rates later in Q3. The Bank of England maintained its
               policy rate at 4.25%, though markets increasingly anticipate a 0.25% rate cut
               in September. The European Central Bank reduced its policy rate from 2.25% to
               2.0%, as inflation in the Eurozone eased to 1.9%, below the ECB's 2% target.

 ·             The yield on the 10-year U.S. Treasury ranged between 4.2% and 4.5% during
               June. This volatility stemmed from persistent trade concerns, fiscal policy
               uncertainty, and the market's reassessment of future U.S. inflation. By June
               month-end, the yield settled at 4.25%, approximately 0.15% - 0.20% below May
               levels, indicating a softening of rates at the short end of the curve.

 ·             U.K. sovereign yields followed a similar path. The 10-year U.K Gilt yield
               declined by approximately 0.15% to 4.5% by the end of the month, but spiked to
               4.6% after June month-end, in the aftermath of the welfare reform vote. The
               10-year German Bund yield fluctuated between 2.5% and 2.6% during June.

 ·             In the near term, de-escalation of trade tension is expected to help ease
               inflationary pressures. While the more recent tariffs are aggressive in scope,
               the U.S. has left room for diplomacy, signalling that countries entering trade
               talks before the 1 August deadline could secure allowances or avoid the new
               measures altogether, which should further reduce inflationary pressures.

 ·             As inflation gradually abates over time, the likelihood of future interest
               rate cuts increases, making alternative investments such as infrastructure
               more attractive when compared to liquid debt. While the pace and size of
               interest rate cuts will vary across the Company's different investment
               jurisdictions, the general consensus remains one of declining interest rates
               throughout the year.

Portfolio Update - June 2025

 

Revolving Credit Facility and Cash Holdings

 

 ·             As of June 2025 month-end, the Company had drawn £94.7 million on its
               revolving credit facility of £300.0 million and had cash of £38.7 million
               (inclusive of interest income), and net undrawn investment commitments of
               £73.6 million.

 

Portfolio Composition

 

 ·             The Company's invested portfolio consisted of 55 private debt investments and
               5 infrastructure bonds, diversified across 8 sectors and 29 sub-sectors.

 ·             59.4% of the portfolio is comprised of senior secured loans reflecting the
               Company's defensive positioning.

 ·             It had an annualised yield-to-maturity (or yield-to-worst in the case of
               callable bonds) of 9.86% and a cash yield of 7.34% (excluding deposit
               accounts).

 ·             The portfolio pull-to-par, which is incremental to NAV as loans mature, is 4.3
               pence per share as of June 2025.

 ·             The weighted average loan life is 3.3 years as of June. This short maturity
               profile means that as loans mature, the Company can take advantage of new
               lending opportunities.

 ·             Private debt investments represented 91.7% of the total portfolio, allowing
               the Company to capture illiquidity yield premiums.

 ·             The Company's invested portfolio currently consists of 40.6% floating rate
               investments and remains geographically diversified with 43.2% located across
               the U.S., 26.8% in the U.K. and 30.0% in Europe.

 

 

 

 

 

 

 

Portfolio Highly Diversified by Sector and Size

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share Buybacks

 

 ·             The Company bought back 2,063,828 of its ordinary shares at an average
               purchase price of 80.75 pence per share in June 2025.

 ·             The Company first started buying back shares in July 2022 and has bought back
               224,629,202 ordinary shares as of 30 June 2025, with the buyback continuing
               into July 2025. This share repurchase activity by the Company continues to
               contribute positively to NAV accretion.

 

New Investment Activity During June 2025

 

 ·             A senior loan for £18.7 million to Community Fibre Limited.  SEQI has
               committed £45 million of a £125 million financing facility to support the
               borrower's continued expansion across London.

 ·             An additional senior loan to GenOn Bowline Power LLC for $1.8 million. The
               borrower is an electricity generator based in New York, USA. The total
               position size on this loan was $28.4 million as of June 2025.

No investments repaid during June 2025.

 

 

 

Non-performing Loans

 

The Company continues to work towards maximising recovery from the
non-performing loans in the portfolio (equal to 0.9% of NAV): There are no new
announcements this month.

 

 

Top Holdings

 

 

 

Valuations are independently reviewed each month by PWC.

 

Full list of SEQI's Portfolio Holdings and SEQI Monthly Factsheet:

http://www.rns-pdf.londonstockexchange.com/rns/0165R_1-2025-7-14.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/0165R_1-2025-7-14.pdf)

http://www.rns-pdf.londonstockexchange.com/rns/0165R_2-2025-7-14.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/0165R_2-2025-7-14.pdf)

 

About Sequoia Economic Infrastructure Income Fund Limited

 

 ·             SEQI is the U.K.'s largest listed debt investor, investing in economic
               infrastructure private loans and bonds across a range of industries in stable,
               low-risk jurisdictions, creating equity-like returns with the protections of
               debt.
 ·             It seeks to provide investors with regular, sustained, long-term income with
               opportunity for NAV upside from its well diversified portfolio. Investments
               are typically non-cyclical, in industries that provide essential public
               services or in evolving sectors such as energy transition, digitalisation or
               healthcare.
 ·             Since its launch in 2015, SEQI has provided investors with ten years of
               quarterly income, consistently meeting its annual dividend per share target,
               which has grown from 5p in 2015 to 6.875p per share in 2023.
 ·             The fund has a comprehensive ESG framework combining sustainability goals, a
               proprietary ESG scoring methodology, alongside processes and metrics with
               alignment to key global initiatives.
 ·             SEQI is advised by Sequoia Investment Management Company Limited (SIMCo), a
               long-standing investment advisory team with extensive infrastructure debt
               origination, analysis, structuring and execution experience.
 ·             SEQI's monthly updates are available here: Monthly Updates -
               seqi.fund/investors/monthly-updates
               (https://www.seqi.fund/investors/monthly-updates/)

 

 

For further information please contact:

 

 Investment Adviser                                    +44 (0)20 7079 0480

 Sequoia Investment Management Company Limited         pm@seqimco.com (mailto:pm@seqimco.com)

 Steve Cook

 Dolf Kohnhorst

 Randall Sandstrom

 Anurag Gupta

 Matt Dimond

 Joint Corporate Brokers and Financial Advisers        +44 (0)20 7029 8000

 Jefferies International Limited

 Gaudi Le Roux

 Harry Randall

 J.P. Morgan Cazenove                                  +44 (0)20 7742 4000

 William Simmonds

 Jérémie Birnbaum

 Public Relations                                      +44 (0)20 7260 2700

 Teneo (Financial PR)                                  sequoia@teneo.com (mailto:sequoia@teneo.com)

 Elizabeth Snow

 Colette Cahill

 Alternative Investment Fund Manager (AIFM)            +44 (0)20 3503 600

sequoia-aifm@fundrock.com (mailto:sequoia-aifm@fundrock.com)
 FundRock Management Company (Guernsey) Limited

 Dave Taylor

 Chris Hickling

 Administrator / Company Secretary                     +44 (0)20 3503 600

 Apex Fund and Corporate Services (Guernsey) Limited   Admin.Sequoia@apexgroup.com (mailto:Admin.Sequoia@apexgroup.com)

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indirectly, in or into the United States of America. This announcement is not
an offer of securities for sale into the United States.  The securities
referred to herein have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the
United States, except pursuant to an applicable exemption from registration.
No public offering of securities is being made in the United States.

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