3i Infrastructure (3IN ) has taken advantage of its comparatively high stock rating with the launch a 330p share issue to raise up to £294m.

The £3bn portfolio of energy transition, social infrastructure and digitalisation companies wants the money to replenish its credit facility and make a mix of follow-on and new investments. 

The timing of the fundraise is unusual, however, coming mid-way between the release of its last 30 September valuation in November and the publication of its 31 March net asset value (NAV) in May.

This leaves 3IN, one of the best-performing listed infrastructure funds over five years, open to an accusation it is fundraising off a stale valuation and could dilute investors if the current NAV is above the share issue price.

‘The last published NAV was 320p (ex the 5.575p dividend) at 3 September 2022,’ said Stifel analyst Iain Scouller in a note to investors this morning. ‘Following the positive January trading update we raised our NAV expectations at 31 March 2023 from 320p-335p to 333p-350p. Therefore, while this equity issue is at a premium to the September NAV, it is probably at a discount to the 31 March 2023 NAV.

‘However, given this revaluation is still two months away, we think shareholders will probably be more relaxed about the potential future NAV dilution argument, than if the issue had been announced closer to 31 March, as a portfolio revaluation would have been expected to coincide with the equity issue.’

Winterflood analyst Emma Bird said: ‘Given the tightness of financial conditions, we would encourage the board to provide better visibility on potential commitments and specify a target raise. This announcement gives 3IN first-mover advantage, and in our view is largely an opportunistic use of its status as one of few funds trading on a premium in the sector.’

In a falling market, 3IN shares slipped 2.1% to 334.2p. After recovering from a sector sell-off following the mini-Budget last September, the shares closed last week with a one-year gain of 1.4% including dividends. They have provided a total return of 90.8% over five years.  

3IN’s chair Richard Laing said: ‘The company continues to deliver strong performance and, since its IPO in 2007, 3iN has delivered an annualised total shareholder return of 12.3% to 31 December 2022. There is strong momentum across the portfolio and the investment manager has identified significant opportunities to invest further in the portfolio.’