Gravis Capital Partners, manager of the £681m FTSE 250 investment trust GCP Infrastructure Investments, is launching its first open-ended vehicle.
The VT UK Infrastructure Income fund aims to deliver a 5 per cent pa dividend, paid quarterly. The fund will allow clients to invest in the UK’s listed infrastructure sector which generates cashflow from areas such as healthcare, education and power generation.
At the time of launch, the fund’s largest allocation will be to electricity and water stocks (amounting to 24 per cent of the fund), followed by solar (19 per cent) and it will also invest in wind power (10 per cent).
Minimum investment into the clean share class is £1,000 and ongoing charges sit at 0.75 per cent.
Comment:
Infrastructure is an area which has grown in both returns and investor interest in recent years. It is a space that can see relatively modest returns and yields, but this fund is aiming to do better.
This fund allows investors who prefer investing in open-ended funds the opportunity to access a fund managed by the same group that has seen solid returns in its investment trust portfolio.
The fund will invest in a diverse range of infrastructure sectors, from hospitals to accommodation, and airports to wind turbines. It will also look to invest in contractors, for example builders of hospitals and companies that plan rail projects.
According to the OECD, investment in infrastructure is needed worldwide and over the next 20 years, it is estimated that between $50tn and $70tn (£34tn and £48tn) will be required. The UK government itself has identified £411bn of infrastructure spending by 2020/21. So this fund could offer early access to the companies that will benefit from this money.
Additionally, as something different to a standard equity fund, this could add real diversity to a fund portfolio. It is also worth noting the accessibility of the fund, which will sit in the UK Equity Income sector. It can be held in Isas, Sipps and offshore bonds and is available on many platforms from launch.
