HICL Infrastructure (HICL ) has extended a spate of acquistions this year with three additions to its £3.4bn, inflation-linked portfolio in the past month.

With cash and a borrowing facility expanded to £730m in July, this week the the steady income fund announced two investments, spending £236.4m on a 45.8% stake in Texas Nevada Transmission (TNT), and £118m on a bid to run the offshore transmission link (OFTO) connecting the Hornsea II wind farm in the North Sea off Yorkshire with the mainland.

This follows the investment company’s acquisition last month of a minority position in Cross London Trains from Equitix Investment Management, its third investment in the rail sector.

The core infrastructure fund started diversifying its UK-centric portfolio earlier in the year, buying a 40% stake in Aotearoa Towers, New Zealand’s dominant masts business, after a £160m fundraise.  

Analysts say the 2022 acquisitions have also changed the revenue mix of the portfolio, adding more regulated, private sector and non-UK cashflows.

TNT, HICL’s fifth investment in North America, will account for around 6% of the closed-end fund. It brings equity interests in two electric transmission entities: Cross Texas Transmission (CTT), a regulated electric utility in Texas, and Great Basin Transmission South (GBTS).

The latter owns a 75% interest in the 231-mile One Nevada Transmission Line which has a long-term contract with NV Energy, a subsidiary of Warren Buffett’s Berkshire Hathaway.

HICL’s partner in the venture is clean energy infrastructure provider LS Power.

The investment in TNT was led by the Americas team of HICL’s fund manager InfraRed. This is headed by Jack Paris who joined last year from Citi bank. Its asset management team in the US was also strengthened last year by the hiring of Jay Crawford who has over 20 years experience in the sector at Cogentrix Energy, Calpine, and Nextera Energy Resources.

‘This acquisition fits firmly within HICL’s vision to support sustainable modern economies and is another example of InfraRed’s international footprint and network enabling HICL to execute its strategic priorities,’ said Edward Hunt, head of the InfraRed’s core income funds team.

The Hornsea II OFTO, where HICL joined the Diamond Transmission consortium alongside Mitsubishi, will account for 3% of the portfolio if, as expected, the deal completes next year. HICL will have a 75% stake of the project which will earn revenues under a 24-year contract for operating the link and making it available.

This involves no exposure to construction risk, electricity production risk or power price risk, Hunt said.

Last month’s acquisition of a minority stake in Cross London Trains (XLT), which owns a fleet of 115 trains operating on the Thameslink route, will represent 3% of HICL’s portfolio and marks its third investment in the rail sector after High Speed I and the Dutch High Speed Rail Link.

Numis estimates UK cashflows represent 65% of the portfolio, down from 73% in March, the US increases into double-digit territory from 9% and New Zealand will represent 5.5% of the portfolio.

The broker calculates that corporate cashflows will represent 9.6% (assuming a roughly even split between regulated and corporate cashflows within TNT) and regulated cashflows increases to 18% from 12%.

The acquisitions come off the back of a strong set of annual results in May and an interim update last month in which the 4.7%-yielder said it was on track to deliver full-year dividends of 8.25p per share.

It also expected that inflation raging over 10% would add between 3p to 3.6p to its net asset value at the end of September. The half-yearly updated NAV last stood at 159p at 31 March.

HICL has previously said its portfolio is 0.8% correlated with inflation, meaning it provides protection against four-fifths of rises in the cost of living. This is because the revenues it earns on many of its facility management contracts are linked to inflation.

The shares currently stand close to a premium of 6% over Numis estimate of NAV per share of 167p. They have gained 3.5% this year and delivered a total return of 23.4% over three years.