REG - Sequoia Econ Infra - NAV and Investment Update

Sequoia Economic Infrastructure Income FundAnnouncement

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RNS Number : 6767W  Sequoia Economic Infra Inc Fd Ld  16 March 2026

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 - February 2026

 

The NAV per share for SEQI, the largest LSE listed infrastructure debt fund,
increased to 93.65 pence per share from the prior month's NAV per share of
93.05 pence, representing an increase of 0.60 pence per share.

                                        pence per share
 31 January 2026 NAV                              93.05
 Interest income, net of expenses                  0.57
 Asset valuations, net of FX movements             0.02
 Subscriptions / share buybacks                    0.01
 28 February 2026 NAV                             93.65

 

 

No expected material FX gains or losses as the portfolio is approximately 100%
currency-hedged. However, the Company's NAV may include short-term unrealised
FX gains or losses, arising from differences in the valuation methodologies
between FX hedges and the underlying investments. These FX-related
fluctuations will typically reverse over time.

 

Key Performance Highlights - February 2026

 

Share price total return of 18.21% over the last twelve months, based on share
price appreciation and total dividends paid.

 

The discount to NAV narrowed to -9.9% at 28 February from -14.5% at 31
January.

 

Dividend yield of 8.15%, based on the closing share price of 84.40 pence and
the annual dividend target of 6.875 pence per share.

 

Weighted average portfolio yield-to-maturity was 9.69% as at 28 February,
reflecting the portfolio's strong income returns.

 

The portfolio pull-to-par (which is incremental to NAV as loans mature over
time) was 3.5 pence per share as at 28 February.

 

 

Market Summary - February 2026

 

Relevant Interest Rate Announcements and Inflation Outlook

 

 ·           During February, 10-year sovereign yields declined across SEQI's key regions
             as inflation continued to trend downward. U.S. yields fell from 4.3% to 3.9%,
             U.K. yields declined from 4.6% to 4.3%, and Eurozone yields moved from 2.9% to
             2.6%. A decline in risk-free rates across these jurisdictions contributed to
             an increase in the valuation of most of the portfolio's fixed-rate investments
             as at February month-end.

 ·           Following month-end, global financial markets experienced a shift in investor
             sentiment amid escalating geopolitical tensions between the U.S. and Iran.
             This led to a broad sell-off in equity markets across the U.S. and Europe as
             investors reassessed risk premia under heightened uncertainty. Government bond
             markets also repriced as February's rally in fixed income reversed. As at 11
             March, yields had risen to 4.2% in the U.S., 4.7% in the U.K., and 2.9% in the
             Eurozone.

 ·           Against this backdrop, expectations for further monetary easing during 2026
             have moderated in recent weeks. While the Investment Adviser had previously
             anticipated a series of interest rate cuts in the U.S. and U.K. before
             year-end, renewed geopolitical tensions have reduced the likelihood of
             near-term policy easing.

 ·           While policy rates remain elevated, SEQI continues to benefit from its
             flexible interest rate positioning, with 59.0% of the portfolio comprised of
             fixed-rate investments as at end February 2026.

 ·           Looking ahead, the outlook for inflation, interest rates and financial markets
             will depend in part on the duration and escalation of the conflict in the
             Middle East. A prolonged period of geopolitical tension could sustain higher
             energy prices and volatility in financial markets, potentially delaying the
             pace of monetary policy easing. Conversely, a stabilisation in the region
             could allow inflationary pressures to ease more quickly and restore the path
             toward gradual interest rate reductions, in which case alternative assets such
             as infrastructure are expected to become increasingly attractive relative to
             traditional liquid debt.

 

Tariff Impact & Geopolitical Analysis

 

 ·           Tensions between the U.S and Iran have escalated into direct military
             confrontation in the region, contributing to heightened geopolitical
             uncertainty and disruption to global energy markets. The U.S. administration
             has also announced that any country doing business with Iran could face a 25%
             tariff on goods entering the U.S.

 ·           These developments have also contributed to renewed volatility in global
             energy markets, with oil and gas prices rising amid concerns over potential
             supply disruptions and wider regional instability. Higher energy prices may
             sustain inflationary pressures across major economies. For borrowers, this
             could translate into higher operating costs and tighter margins in certain
             sectors, such as transport assets, potentially reinforcing a more prolonged
             "higher for longer" interest rate environment if inflation moderates more
             slowly than expected.

 ·           At this stage, the direct impact of these developments on SEQI's borrowers
             appears limited. The Company has low sensitivity to oil price movements in the
             short term. The Investment Adviser is nonetheless actively assessing any
             potential longer-term impact on underlying borrowers.

 ·           Periods of market dislocation may also create opportunities. A meaningful
             widening in credit spreads, could present attractive opportunities for new
             lending at higher risk-adjusted returns.

 ·           The extent to which these dynamics emerge will depend largely on the duration
             and trajectory of the current geopolitical and macroeconomic environment.

Portfolio Update - February 2026

 

Revolving Credit Facility and Cash Holdings

 

 ·           As of February month-end, the Company was net undrawn on its £300 million
             revolving credit facility and held cash of £51.6 million (inclusive of
             interest income). The Company also had net undrawn investment commitments of
             £59.5 million, with additional investments scheduled to settle before the
             fiscal year-end.

Portfolio Composition

 

 ·           The Company's invested portfolio consisted of 48 private debt investments and
             2 infrastructure bonds, diversified across 8 sectors and 25 sub-sectors.

 ·           62.6% of the portfolio was comprised of senior secured loans, reflecting the
             Company's defensive positioning.

 ·           The weighted average loan life was 3.1 years as  at the end of February 2026.

 ·           Private debt investments which allow the Company to capture illiquidity yield
             premiums, represented 94.8% of the total portfolio.

 ·           The Company's portfolio remained geographically diversified, with 43.9% of
             investments located in the US, 33.7% in Europe and 22.4% in the UK.

 

Diversified Portfolio

 

 

Portfolio by Sector

 

 

 

 

Share Buybacks - February 2026

 

 ·           The Company bought back 3,787,953 of its ordinary shares at an average
             purchase price of 79.82 pence per share during February 2026.

 ·           The Company first started buying back shares in July 2022 and since then has
             spent £226.1 million buying back 280,758,909 ordinary shares by the end of
             February 2026, representing approximately 17% of the shares in issue as at
             month-end.

 ·           This share repurchase programme by the Company continues to contribute
             positively to NAV accretion. The Board has been pleased to see the narrowing
             of the discount to NAV, which was -9.9% based on the closing share price of
             84.40 pence as at February month-end.

 ·           The Board applies a dynamic approach to share buybacks which takes into
             account available portfolio liquidity, the relative discount to NAV and other
             relevant factors. The share buyback programme will continue to remain in
             place.

 

 

New Investment Activity - February 2026

 

 ·           Repricing and refinancing of OCU Group, a leading UK infrastructure
             engineering services provider. As part of the transaction, SEQI rolled its
             existing exposure into the new loan with a total commitment of £55 million,
             of which £52.3 million had settled as at February month-end. The
             yield-to-maturity on this loan is 8.76%.
 ·           Senior loan of $55 million to Linden Variable Frequency Transformer, LLC
             ("LVFT"), a 315 MW controllable transmission facility in Linden, New Jersey
             connecting the PJM and NYISO electricity markets. The asset has demonstrated
             strong operational performance since 2009 and benefits from contracted
             revenues with high-quality counterparties and long-dated interconnection
             rights supporting stable cash flows. The yield-to-maturity on this loan is
             7.72%.
 ·           An additional secured loan of £5.0 million to Active Care Group ("ACG"), a UK
             national provider of accommodation and complex care services, on similar
             economic terms as previous senior lending to ACG. This new loan will provide
             further working capital for ACG to help support its growth-led portfolio
             optimisation, as well as invest in ACG's growing neuro-rehabilitation
             division, Active Neuro. ACG's turnaround is progressing in line with
             expectations, and the company has made meaningful operational and financial
             progress since SEQI became its majority equity owner in May 2024. ACG's CQC
             inspection ratings over the past 12 months have improved substantially and the
             company has returned to operational profitability.

             ACG is implementing a portfolio optimisation programme designed to strengthen
             its balance sheet and invest in better aligning its portfolio with long-term
             growth opportunities, including in private neuro-rehabilitation facilities.
             SEQI believes that this portfolio optimisation programme will enable ACG's
             management to increase the value of the business and thereby support recovery
             of the loan.

             SEQI's total exposure to ACG following the provision of this new funding is
             £95.7 million or 6.9% of NAV, making it SEQI's largest exposure. The Board
             and Investment Adviser, with the support of the AIFM, will continue to closely
             monitor  and manage the position to maximise value in the future.
 ·           An additional senior secured loan of €4.2 million to finance the
             construction of a portfolio of ready-to-build Solar P.V. plants in Poland.
             Poland continues to robustly support the transition of its coal-dependant
             energy system and remains committed to its ambition of achieving long-term
             energy security and energy sustainability. The transaction benefits from
             robust credit protections and strong track record of the sponsor in owning and
             operating renewable power assets in Europe. The loan is projected to deliver a
             YTM of approximately 8.9%.
 ·           An additional senior loan of €4.0 million to Muehlhan Holding GmbH, as part
             of a €225 million bond issuance. The borrower is an established global
             industrial services provider operating across the renewables, infrastructure,
             marine, industry and construction sectors. Core services include onshore and
             offshore wind installation and maintenance, surface protection, scaffolding,
             insulation, welding and electrical works. The YTM on this loan is 7.31%.

 

Investments that Repaid During February 2025

 ·           A full repayment for €65.0 million from a HoldCo loan to Project Murphy to
             support a bid for a majority stake in an interconnector between the U.K. and
             Ireland.

 

Non-performing Loans - February 2026

 

 ·           The Company continues to work towards maximising recovery from the
             non-performing loans in the portfolio (amounting to 0.3% of NAV). There are no
             additional material updates on non-performing loans for February 2026.

 

Top Holdings - February 2026

 

 

Valuations are independently reviewed each month by PwC.

http://www.rns-pdf.londonstockexchange.com/rns/6767W_1-2026-3-15.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/6767W_1-2026-3-15.pdf)

http://www.rns-pdf.londonstockexchange.com/rns/6767W_2-2026-3-15.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/6767W_2-2026-3-15.pdf)

 

 

About Sequoia Economic Infrastructure Income Fund Limited

 

 ·           SEQI is the UK'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 eleven years of
             quarterly income, consistently meeting its annual dividend per share target,
             which has grown from five 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 SIMCo, a long-standing investment advisory team with
             extensive infrastructure debt origination, analysis, structuring and execution
             experience.
 ·           SEQI's monthly updates are available here: 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@simcofunds.com (mailto:pm@simcofunds.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

 Rupert Budge

 William Simmonds

 Public Relations                                      +44 (0)20 7260 2700

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

 Rob Yates

 Jessica Pine

 Alternative Investment Fund Manager (AIFM)            +44 ( (tel:+44%2020%203530%203626) 0) (tel:+44%2020%203530%203626) 20 3530

                                                      36 (tel:+44%2020%203530%203626) 00
 FundRock Management Company (Guernsey) Limited

 Ben Snook

+44 ( (tel:+44%2020%203530%203626) 0) (tel:+44%2020%203530%203626) 20 3530
 Chris Hickling                                        36 (tel:+44%2020%203530%203626) 00

+44 ( (tel:+44%2020%203530%203626) 0) (tel:+44%2020%203530%203626) 20 3530
                                                       36 (tel:+44%2020%203530%203626) 00

sequoia-aifm@fundrock.com (mailto:sequoia-aifm@fundrock.com)
 Administrator / Company Secretary                     +44 (0)20 7592 0419

 Apex Fund and Corporate Services (Guernsey) Limited   admin.sequoia@apexgroup.com (mailto:admin.sequoia@apexgroup.com)

 Aoife Bennett

 +44 ( (tel:+44%2020%203530%203626) 0) (tel:+44%2020%203530%203626) 20 3530
 36 (tel:+44%2020%203530%203626) 00

sequoia-aifm@fundrock.com (mailto:sequoia-aifm@fundrock.com)

 

 

Administrator / Company Secretary

Apex Fund and Corporate Services (Guernsey) Limited

Aoife Bennett

 

+44 (0)20 7592 0419

admin.sequoia@apexgroup.com (mailto:admin.sequoia@apexgroup.com)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This announcement is not for publication or distribution, directly or
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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