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The £437.9m HSBC Infrastructure Company has defied the market downturn thanks to the increase in the number of underlying investments, the company has claimed.

Last week the investment trust announced a large increase in pre-tax profits, up by 28 per cent to £15.1m for the year to 31 March, compared with £11.8m for the previous year.

Between launch on 3 April 2006 and 26 May 2008, the trust returned 23.19 per cent, compared with 9.28 per cent for the FTSE All-Share index over the same period, according to Morningstar.

Over the 12 months to the same date, the trust returned 14.94 per cent, compared with a loss of 5.95 per cent for the FTSE All-Share.

All but one of the investments in the HSBC Infrastructure Company’s portfolio are PFI/PPP projects with public sector clients, including the Home Office, Colchester Garrison and several hospitals and schools. The fund started with 10 investments but this has now increased to 27.

Tony Roper, director responsible for running the fund, ascribed some of the increase in returns to the portfolio’s expansion. "The nature of our projects means it can be difficult to increase revenue on an individual basis, as income is fixed. But if we can reduce costs, returns will increase," he said.

"We were fully invested when we launched, but over the past two years, the expansion of the portfolio has given us economies of scale on an individual level, to create cost efficiencies. For instance, each of our projects has to purchase insurance, and we have started to insure in bulk to get better rates."

He added performance should be relatively immune to the current woes of the property market.

"Once construction is complete, we get paid regardless of whether the client moves in or not. That is attractive to investors."

Nearly all the investments are in the UK, but Mr Roper said the fund would be looking to invest in PFI projects overseas, especially in Ireland, as well as in UK regional toll roads and airports.

Meera Patel, senior analyst at Bristol-based IFA Hargreaves Lansdown, said: "Most people think of infrastructure as an emerging market play, but there is a lot of underinvestment in the sector in the UK, US and Europe. For instance, roads built years ago are not being maintained, while the recent bad weather has meant railway tracks have flooded because they cannot cope with the rain.

"Because of this, the growth opportunities in infrastructure are vast. However, as with commodities, the sector has a long growth cycle, so it will take 15 or 20 years to play out its potential."