3i Infrastructure (3IN ), the best-performing infrastructure fund outside of renewables over one, three and five years, has issued a first-quarter statement seeking to ease investors’ concerns after a recent selloff in the sector.

In a performance update covering 1 April to 30 June, managers Scott Moseley and Bernardo Sottomayor revealed a number of contract wins by three portfolio companies: Esvagt, a tug operator that accounts for 13% of assets; TCR, the airport ground equipment provider to which the fund is 15% invested; and Tampnet, the Norwegian offshore communications network operator, which made an acquisition.

3IN said its investments continued to display earnings momentum from inflation-linked revenues and growth opportunities.

It revealed a further investment of €24m (£20m) was made in DNS:NET last month to help with the rollout of its fibre network. Ralph Steffens, former chief executive of Truphone in the UK, has been appointed a co-CEO.

In a difficult day for the UK stock market yesterday when the statement was released, the shares eased 0.9%, or 3p, to 312p, to close on a near-9% discount to net asset value, but have risen back to 314p today.

Attero timetable

Analysts said the slight wobble reflected some disappointment at the length of time it was taking for 3IN to sell its 25% stake in Attero, the Dutch energy-from-waste generator. 

3IN announced in January it was looking to dispose of the stake, which was valued at £144m, or 4% of assets, with proceeds going to repay some of the £615m it has drawn down from its £900m credit facility.

Yesterday it said the deal was progressing in line with expectations and was scheduled to complete in the second quarter of the year.

‘This may be a little later than the market had expected,’ said Numis analyst Colette Ord, who added that the borrowings represented 15% of total assets.

3IN reiterated it faced little refinancing risk from rising interest rates, with 90% of its debt maturing beyond three years.

Cash income generated in the first quarter was £55m, up 53% from a year ago, paving the way for the payment on Monday of the final 2023 dividend of 5.575p per share. The £2.9bn, 3.8%-yielder is also on track to deliver its target for the current financial year of 11.9p per share, up 6.7% from the previous year and fully covered by earnings.

‘Given the good long-term track record and sensible balance sheet management, we continue to think the valuation is attractive and reiterate a “buy” recommendation,’ said Stifel analysts Will Crighton and Iain Scouller.

In May, 3IN reported a total return of 14.7% for the year to 31 March, well ahead of its 8-10% annual target. Shares in the Jersey investment company have fallen 5% this year but delivered a 59% total return to shareholders over five years.

The share price discount is the lowest of its immediate rivals and compares well with the 18% average discount across all London-listed infrastructure funds, including renewables, according to Numis data.