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Fund manager leaves John Laing Infrastructure

19 May 2017

Andrew Charlesworth, lead manager of John Laing Infrastructure, the most highly rated fund investing in contracts to run train lines, schools and hospitals, has quit.

Andrew Charlesworth, lead fund manager to John Laing Infrastructure (JLIF), has quit to ‘pursue opportunities in the global infrastructure market’, according to the company.

Charlesworth, a director of John Laing Capital Management (JLCM), JLIF’s investment adviser, will leave next week. He helped launch the company in 2010 when it floated at £259 million and oversaw its growth to its current market value of £1.38 billion, helped by a £119.5 million share placing in March.

Charlesworth, who had over 21 years’ experience in infrastructure, will be replaced by JLCM’s David Hardy who will move over from John Laing Environmental Assets (JLEN) where he is a co-lead adviser. In his new role he will run the five-strong team in charge of JLIF’s portfolio of over 60 infrastructure projects.

Analysts expressed disappointment at the move, which comes two years after the retirement of David Marshall, who worked with Charlesworth on the portfolio from its listing on the London Stock Exchange.

Ewan Lovett-Turner of Numis Securities said Charlesworth played an important role in diversifying the fund internationally. Last year it bought a 40% interest in one of Barcelona’s commuter train lines and all of Connecticut Service Stations in the US.

‘While the strong board and access to a sizeable team through John Laing Capital Management will give investors some comfort, we feel his departure is an unhelpful disruption at a time when investors still digesting the risk/return dynamics of recent investments,’ he said.

According to Numis’ calculations, JLIF shares are the most highly rated of the handful of listed infrastructure funds, standing at a premium of 17% above its estimated net asset value at yesterday’s close.

According to its full-year results in March, between flotation in November 2010 and the end of 2016 JLIF delivered a total shareholder return of 76.5%, equivalent to annualised growth of 9.8%.
This year the shares have advanced 10.6%, more than double the official growth in the portfolio.

Unlike its rivals, which value their portfolios every six months, JLIF’s is re-valued every quarter. Today it revealed a total return in net asset value (NAV) of 5.1% in the first quarter with NAV per share up 2.7p to 122.9p (or 119.4p excluding the dividend) on 31 March. The stock yields 5%, the highest in the sector.

Iain Scouller of Stifel believed the shares would continue to trade on a big premium, given the yield and ‘reasonable’ portfolio performance. ‘Our fair value remains 136p, a 10% premium to our estimated NAV at 30/06/17, plus an estimated interim dividend of 3.5p. The shares are close to our fair valuation and we therefore maintain a “hold” recommendation,’ he said in a note to investors.

Both shares in JLIF and JLEN were unchanged at 139.9p and 112.7p respectively.

Numis is corporate broker to International Public Partnerships (INPP), Stifel acts for BBGI (BBGI) and JPM Cazenove for JLIF.

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