REG - Sequoia Econ Infra - NAV and Investment Update

Sequoia Economic Infrastructure Income FundAnnouncement

15/10/2025 07:00

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RNS Number : 3560D  Sequoia Economic Infra Inc Fd Ld  15 October 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 FACTSHEET & COMMENTARY - September 2025

 

The NAV per share for SEQI, the largest LSE listed infrastructure debt fund,
increased to 93.67 pence per share from the prior month's NAV per share of
92.48 pence, representing an increase of 1.19 pence per share.

                                        pence per share
 31 August NAV                             92.48
 Interest income, net of expenses                 0.65
 Asset valuations, net of FX movements            0.42
 Subscriptions / share buybacks                   0.02
 30 September NAV                                93.67

 

 

Gains in asset valuations, net of FX movements, were primarily driven by the
early repayment of the loan to Infinis Energy at par value, crystallising
pull-to-par benefits, together with successful settlements in the full
recoverability of the Bulb Energy loan and the sale of Jetpeaks.

 

No expected material FX gains or losses as the portfolio is approximately 100%
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 current high interest rates; 61.7% of the
portfolio is in fixed rate investments as of September 2025.

 

Market Summary

 

 

Interest Rate Announcements and Inflation

 

 ·             During September, the U.S. Federal Reserve implemented its first interest rate
               cut since December last year, lowering the policy rate by 0.25% to 4.0%. The
               yield on 10-year U.S. Treasuries fell by 0.10% to 4.15% by month-end, with
               short-term yields declining more sharply as markets priced in expectations of
               further cuts before year-end.

 ·             In the U.K., the Bank of England maintained base rates at 4.0%, as expected,
               given limited fiscal headroom, persistent inflationary pressures, and
               uncertainty around the fiscal outlook ahead of the Autumn Budget. Against this
               backdrop, the yield on 10-year UK Gilts remained at 4.7%.

 ·             In the Eurozone, the 10-year German Bund yield remained stable at 2.7%, with
               the European Central Bank holding its policy rate at 2.0% in September. This
               decision reflected continued sluggish growth in the bloc and inflation
               remaining at a steady rate.

 ·             The Investment Adviser observed modest movements in base rates during the
               month. The valuation of most fixed-rate investments increased marginally, due
               to the roll forward, or "pull-to-par" effect, as bonds moved closer to
               maturity.

 ·             In the near term, the easing of trade tensions is expected to help reduce
               inflationary pressures. However, pre-tariff inventory building has complicated
               the assessment of tariffs' true short-term impact on both inflation and
               growth. Central banks continue to walk a difficult tightrope, seeking to
               prevent recession while avoiding a resurgence of inflation.

 ·             The pace and size of any interest rate changes will vary across the Company's
               different investment jurisdictions. In the U.S., market participants currently
               expect at least one additional interest rate cut before the end of the year.
               In the U.K., inflation remains above target levels, and the Bank of England is
               now widely expected to hold rates at current levels through early 2026. In the
               Eurozone, the European Central Bank is similarly anticipated to maintain its
               current rate stance, with policy broadly on hold unless inflation abates
               further.

 

 

Tariff Impact & Geopolitical Analysis

 

 ·             During September, the U.S. and China extended their tariff truce, delaying
               further duties while Washington imposed targeted tariffs on timber, furniture,
               and household goods from mid-October.

 ·             The E.U. suspended retaliatory measures against the U.S. for six months and
               advanced proposals to reduce industrial tariffs and stabilise automotive
               trade. The U.K. and U.S. continued to expand their Economic Prosperity Deal,
               cutting tariffs on key sectors such as automobiles, steel, and aerospace,
               though certain U.K. goods and services sectors remain excluded.

 ·             The Investment Adviser has assessed tariff risk in the portfolio as low, given
               the limited direct exposure to sectors such as shipping, ports and aviation.
               Moreover, the Company's exposure to the U.S. has declined by 4.7% over the
               past six months, and its loans to defensive sectors, which are typically less
               sensitive to the business cycle, remains high, at 53.5%.

 ·             Looking ahead into Q4, trade policy remains an ongoing source of potential
               volatility. While markets may continue to react to tariff-related
               announcements, the scale of reaction is unlikely to match the turbulence seen
               earlier in 2025.

 

 

Portfolio Update

 

Revolving Credit Facility and Cash Holdings

 

 ·             As of 30 September 2025, the Company had drawn £33.2 million on its revolving
               credit facility of £300.0 million and had cash of £84.1 million (inclusive
               of interest income), due to significant early repayments at month-end from
               Project Nimble and Tracy Hills, and net undrawn investment commitments of
               £99.1 million. The revolving credit facility is utilised for liquidity
               management and bridging purposes.
 ·             In anticipation of the two prepayments, the Company increased leverage in the
               months leading up to September 2025. Whilst it has since de-levered, the
               Company also maintains a strong near-term pipeline for capital redeployment,
               with further updates to follow as new transactions close.

Portfolio Composition

 

 ·             The Company's invested portfolio consisted of 50 private debt investments and
               3 infrastructure bonds, diversified across 8 sectors and 28 sub-sectors.

 ·             57.2% of the portfolio is comprised of senior secured loans reflecting the
               Company's defensive positioning.

 ·             The portfolio pull-to-par, which is incremental to NAV as loans mature, was
               3.1 pence per share as of September 2025, down from 3.8 pence per share during
               August, as gains on Infinis Energy were crystallised through early repayment
               and revaluation effects.

 ·             It had an annualised yield-to-maturity (or yield-to-worst in the case of
               callable bonds) of 9.69% and a cash yield of 7.19% (excluding deposit
               accounts).

 ·             The weighted average loan life is 3.2 years as of September 2025.

 ·             Private debt investments represented 94.6% of the total portfolio, allowing
               the Company to capture illiquidity yield premiums.

 ·             The Company's portfolio remains geographically diversified with 41.1% located
               across the U.S., 30.9% in the U.K. and 28.0% in Europe.

 

 Portfolio Highly Diversified by Sector and Size

 

 

 

 

 

 

 

 

Share Buybacks

 

 ·             The Company bought back 1,873,688 of its ordinary shares at an average
               purchase price of 77.32 pence per share in September 2025.

 ·             The Company first started buying back shares in July 2022 and has bought back
               230,139,325 ordinary shares as of 30 September 2025, with the buyback
               continuing into October 2025. This share repurchase activity by the Company
               continues to contribute positively to NAV accretion.

 

New Investment Activity during September 2025

 

 ·             Senior loan for €2.8 million to Grange Backup Power Ltd, an Irish power
               asset supporting data centre operations. In total, the Company has committed
               €60.0 million to this loan, which offers a yield-to-maturity of 8.92%.
 ·             Senior loan for €2.7 million to Project Crystal, a leading provider of
               diagnostic imaging and radiotherapy services through an extensive network of
               clinics across Germany. The business benefits from a stable regulatory
               environment, the essential nature of its services in delivering high-quality
               medical care, and significant barriers to entry. In total, the Company has
               committed €29.5 million to this loan, which carries a yield-to-maturity of
               6.44%. When swapped into the Fund's base currency, this is equivalent to a
               yield-to-maturity of approximately 8.1%.

Investments that repaid during September 2025

 

 ·             Full repayment of $66.0 million from Tracy Hills and an early repayment fee.
               The borrower is a residential infrastructure project in California.

 ·             Full repayment of €53.0 million from Project Nimble, a Netherlands-based
               data centre.

 ·             Full repayment of Techem bonds for €10.1 million, a leading provider of
               energy services headquartered in Eschborn, Germany.

 ·             Full sale of the Jetpeaks loans for an upfront amount marginally higher than
               last valuation plus potential deferred consideration.

 ·             Partial sale of Brightline East LLC bonds for $4.7 million, and an additional
               $3.1 million just after September month-end. The borrower is a privately owned
               passenger rail project in Florida.

 

Non-performing Loans

 

 ·             The Company continues to work towards maximising recovery from the
               non-performing loans in the portfolio (equal to 0.5% of NAV). There are no
               additional announcements of non-performing loans 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/3560D_1-2025-10-14.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3560D_1-2025-10-14.pdf)

http://www.rns-pdf.londonstockexchange.com/rns/3560D_2-2025-10-14.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3560D_2-2025-10-14.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 5 pence in 2015 to 6.875 pence per share.
 ·             The fund has a comprehensive sustainability 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 3530 3600

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

 Ben Snook

 Chris Hickling

 Administrator / Company Secretary                       +44 (0)20 3530 3600

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

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