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Data as at: 02/05/2024

Gearing

Gearing (%)
0
Net cash (%)
80
Historic gearing 3yr low/high (%)
0 / 0
Gearing range (%)
N/A
Gearing policy

Gearing is not used at the Company level. Gearing may be used on a non-recourse basis at the asset level, either by the SPVs holding the assets or intermediate holding companies, but will not exceed 65% of the Group’s gross asset value (which includes the proportionate share of the borrowings at the level of the Company’s investments), with the Company targeting below 50% in the medium term.

Ways in which investment companies can magnify income and capital returns, but which can also magnify losses.

At its simplest, gearing means borrowing money to buy more assets in the hope the company makes enough profit to pay back the debt and interest and leave something extra for shareholders.

how gearing works table

However, if the investment portfolio doesn’t perform well, gearing can increase losses. The more an investment company gears, the higher the risk.

Investment companies can usually borrow at lower rates of interest than you’d get as an individual. They also have flexible ways to borrow – for example they might get an ordinary bank loan or, for split capital investment companies, issue different classes of share.

Not all investment companies use gearing, and most use relatively low levels of gearing.

An indication of the maximum and minimum levels that the company would expect to be geared in normal market conditions.

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