HICL Infrastructure (HICL ) has bought into Vodafone’s mobile phone towers business in New Zealand, making it the alternative income fund’s only investment outside Europe and North America, after raising £160m from investors.

The investment company, which is best known for investing in public sector facilities such as hospitals, toll roads and Affinity water company, is buying a 40% stake in Aotearoa Towers, New Zealand’s dominant masts business. The company, which has been spun off from Vodafone, owns 1,484 towers covering 98% of the country’s population, HICL said, describing it as a ‘strategic and highly attractive digital infrastructure acquisition’.

HICL, which is investing alongside Canada’s Northleaf Capital Partners, did not say how much it was paying but said the stake would account for 7%, or £224m of its £3.2bn portfolio at the end of March.

This isn’t the 100-strong portfolio’s first investment outside Europe and North America, having previously owned an asset in Australia. Fund manager Infrared Capital has an office in Sydney and has invested in the region since 2009.

Adding Aotearoa lifts HICL’s recently-acquired weighting in digital communications infrastructure to 9%. It follows the purchase of a 55% stake in French broadband fibre network provider ADTIM in May.

HICL said the perpetual nature of the tower assets would extend the average maturity of its holdings and improve its 70% correlation with inflation, as Aotearoa’s link to price increases was ‘materially in excess’ of its own.

Aotearoa will have a long-term, availability-based revenue contract with Vodafone NZ, indexed to inflation and set for 20 years with the option of two ten-year extensions. Vodafone has committed to add more sites over the next ten years, increasing the business’ asset base and revenues, HICL said.

Edward Hunt, head of core income funds at HICL’s fund manager, Infrared Capital, said: ‘This acquisition further executes on HICL’s vision to connect communities by providing essential communications infrastructure. The entrenched market positioning of the asset, combined with the long-term, contracted revenues generated under a CPI-linked contract, are a key attraction of this core infrastructure asset of the modern economy.’

On Friday HICL said there had been strong investor support, including £5m from private investors, for the £160m ‘tap’ issue, which will clear its £90m overdraft and contribute to the towers acquisition.

Infrared’s parent Sun Life Assurance of Canada bought £15m of the new shares at 169p on a 2.6% premium to net asset value, its first investment in HICL since buying 80% of the fund manager in 2019. It also recently subscribed to the share issue of the manager’s other investment trust, Renewables Infrastructure Group (TRIG ).

In an update to investors, HICL said higher inflation had added 3p to 3.6p to its net asset value which stood at 163.1p at 31 March (or 161.1p after payment of the last quarterly dividend).

HICL shares rose 1.4% to 171.3p this morning at a 4% premium to NAV, according to Winterflood Securities. Shares in the 4.8%-yielder are flat this year but over three years have generated a total return of 24.6% to shareholders including dividends.