Trust buyers sell 'expensive' infrastructure holdings on premium fears

Investment trust buyers are selling their infrastructure holdings, rotating into open-ended vehicles or exiting the sector entirely as premiums hit record levels.

After a torrid financial crisis, the sector moved from an average discount to a premium in 2010, climbing to as high as 15% in August as investors search for alternative sources of income. Trusts have taken the opportunity to issue large tranches of new equity, depressing premiums and sparking concern among buyers. John Laing Infrastructure raised £242m last month, HICL Infrastructure raised £250m in two rights issuances earlier this year, and Bilfinger Berger Global Infrastructure has announced a proposed issue of £200m. “We have retreated from infrastructure: the space has grown ...