Digital 9 Infrastructure (DGI9 ) expects to announce its new fund manager as early as next month as the investment trust takes steps to sell a stake in one of its portfolio companies and allow another to borrow money.

In the 2022 results published today, the company said fund manager Triple Point had identified a candidate for head of digital infrastructure to replace Thor Johnsen who quit last November, taking with him investment director Andre Karihaloo. The new individual, who will become the lead manager of the £897m portfolio, will be announced in the second quarter, DGI9 said.

DGI9 shares eased 1.3p to 81.1p, 19% below their launch price two years ago, and on a wide 25% discount to their net asset value following Johnsen’s exit. This prevents share issues to raise funds for its £223m investment pipeline. 

The firm said it had started two initiatives to raise capital: appointing a bank to syndicate a minority stake to a strategic partner in one of its nine portfolio companies, and agreeing a £100m borrowing facility for another of its high-growth businesses.

Currently, Arqiva, the UK TV network provider, is the only company in DGI9’s portfolio with debt.

The firm sought to reassure investors the moves would only be completed if they enhanced shareholder value. ‘Debt financing at investee company level is only appropriate where the incremental return on new investment would significantly exceed the cost of debt,’ DGI9 added.

DGI9 yields 7% but its 6p of quarterly dividends were uncovered by cash income, leaving some analysts concerned about the impact of further borrowing on its income.

Stifel analyst Sachin Saggar said the 0.4 times cover disclosed by the company did not appear to have been done on a pro-rata basis and assumed investments were held in full through 2022. ‘Hence, actual dividend cover in 2022 is materially lower,’ it said.

The company had already published its 10.4% investment return for last year with NAV rising to 109.8p from 104.6p per share over 2022. The increase was driven by portfolio revaluations, the biggest of which was for Aqua Comms, the trans-Atlantic sub-sea cable provider used by global internet companies such as Amazon.