John Laing trust looks to broaden investment remit

Infrastructure investment trust John Laing Infrastructure Fund (JLIF) has written to shareholders looking to broaden out its investment remit.

The £891.2 million investment trust, which has tripled in size since its launch in 2010, invests in government-backed public private partnership (PPP) infrastructure projects.

In its proposal to shareholders, it is asking to amend its investment policy to allow it to invest up to 10 per cent of its assets in projects that are not PPP deals but are of a similar structure.

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The board of the trust is also proposing to double the percentage of its total assets to be in projects that are still under construction from 15 per cent to 30 per cent.

Buying into projects still under construction increases the risk involved in the investment and also delays the generation of any income from the project, but it also increases the potential overall return.

The board of JLIF is also asking shareholders to amend its policy with parent company John Laing, a UK developer.

It is looking to expand its ‘first offer agreement’ with John Laing to allow the trust first access to more its projects, which the trust said would result in an “increase in the pipeline from John Laing of approximately £115m over the next six years”.

Infrastructure investment trusts have become a hugely popular asset class in recent years, providing a stable income that is uncorrelated to equity or bond markets.

However, that popularity has led the trusts to become very expensive and the shares of the John Laing trust are currently trading at a 9.9 per cent premium to the net value of the trust’s assets, according to data from the Association of Investment Companies.