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Sequoia Economic Infrastructure Income Fund Limited ("SEQI" or the "Company")
Monthly NAV and portfolio update - May 2025
The NAV per share for SEQI, the largest LSE listed infrastructure debt fund, increased to 91.79 pence per share from the prior month's NAV per share of 91.32 pence, (being the 30 April 2025 cum-income NAV of 93.04 less the dividend of 1.71875 pence per share declared in respect of the quarter ended 31 March 2025 and payable on 30 May 2025[1]), representing an increase of 0.47 pence per share.
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| pence per share |
| 30 April NAV | 93.04 |
| Interest income, net of expenses | 0.64 |
| Asset valuations, net of FX movements | -0.21 |
| Subscriptions / share buybacks | 0.04 |
| Dividend | -1.72 |
| 31 May NAV | 91.79 |
No expected material FX gains or losses as the portfolio is approximately 100.1% currency-hedged. However, the Company's NAV may include unrealised short-term FX gains or losses, driven by differences in the valuation methodologies of its FX hedges and the underlying investments - such movements will typically reverse over time.
Well positioned to benefit from high interest rates; 58.6% of portfolio is in fixed rate investments as of May 2025.
Market Summary - May 2025
Tariff Impact & Geopolitical Analysis
| · | A 90-day pause in U.S.- China tariff escalation, announced in May 2025 alongside initial mutual tariff reductions, marked a significant step toward easing global trade tensions.
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| · | Senior U.S. and Chinese officials also met in London on 9-10 June, holding two days of constructive talks that produced a provisional framework deal aimed at reducing trade barriers and advancing long-term economic cooperation.
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| · | While geopolitical uncertainty persists, recent developments, including President Trump's indication that tariffs are unlikely to return to peak levels, offer cautious optimism for improved trade stability and macroeconomic conditions.
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| · | Infrastructure is broadly recognised as a defensive asset class, typically exhibiting resilience during periods of market volatility. SEQI's portfolio is deliberately positioned to reflect this, with minimal exposure to more cyclical subsectors such as oil refining, aviation, and container ports. As of May 2025, 54.7% of the Company's investments are concentrated in traditionally defensive areas, including renewables, digital infrastructure, utilities, and accommodation. |
Interest Rate Announcements and Inflation Data
| · | On 8 May, the Bank of England reduced its base rate by 0.25% to 4.25%, while the Federal Reserve and the European Central Bank (the ECB) maintained their policy rates during the month. On 6 June (after month-end), the ECB lowered interest rates by 0.25%, to 3.75%.
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| · | Yields on 10-year U.S. Treasury notes fluctuated between 4.2% and 4.6% during May, reflecting ongoing concerns around trade tariffs and their inflationary impact. The yield ended the month at approximately 4.4%, around 0.2% higher than at end-April. U.S. CPI inflation also edged up to 2.4% in May, from 2.3% in April.
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| · | Similarly, yields on 10-year UK Gilts rose by approximately 0.2%, reaching 4.65% by month-end. This increase was driven by stronger-than-expected inflation in April 2025, which rose to 3.5%, up from 2.6% in March. Meanwhile, the yield on 10-year German bunds remained steady at 2.5% month-on-month. Eurozone CPI inflation fell more than expected, declining from 2.2% in April to 1.9% in May, below the ECB's 2.0% target.
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| · | In the near term, the temporary trade agreement between the U.S. and China, which includes a significant reduction in tariffs, is expected to further ease some inflationary pressures. While headline inflation remains influenced by residual supply chain effects and sector-specific dynamics, the de-escalation in trade tensions has tempered expectations of further price shocks stemming from import costs.
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| · | As inflation gradually abates over time, the likelihood of future interest rate cuts increases, making alternative investments such as infrastructure more attractive when compared to liquid debt. While the pace and size of interest rate cuts will vary across the Company's different investment jurisdictions, the general consensus remains one of declining interest rates throughout the year.
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Portfolio Update - May 2025
Revolving Credit Facility and Cash Holdings
| · | As of May 2025 month-end, the Company had drawn £76.4 million on its revolving credit facility of £300.0 million and had cash of £11.1 million (inclusive of interest income), and undrawn investment commitments of £117.8 million.
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Portfolio Composition
| · | The Company's invested portfolio consisted of 54 private debt investments and 5 infrastructure bonds, diversified across 8 sectors and 29 sub-sectors.
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| · | 59.5% of the portfolio is comprised of senior secured loans ensuring defensive positioning.
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| · | It had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 10.03% and a cash yield of 7.43% (excluding deposit accounts).
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| · | The portfolio pull-to-par, which is incremental to NAV as loans mature, is 4.5 pence per share as of May 2025.
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| · | The weighted average portfolio life increased marginally to 3.5 years. This short duration means that as loans mature, the Company can take advantage of higher yields in the current interest rate environment.
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| · | Private debt investments represented 91.0% of the total portfolio, allowing the Company to capture illiquidity yield premiums.
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| · | The Company's invested portfolio currently consists of 41.4% floating rate investments and remains geographically diversified with 44.8% located across the U.S., 25.4% in the U.K. and 29.8% in Europe.
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Portfolio Highly Diversified by Sector and Size
Share Buybacks
| · | The Company bought back 4,090,820 of its ordinary shares at an average purchase price of 76.55 pence per share in May 2025.
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| · | The Company first started buying back shares in July 2022 and has bought back 222,565,365 ordinary shares as of 31 May 2025, with the buyback continuing into June 2025. This share repurchase activity by the Company continues to contribute positively to NAV accretion.
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New Investment Activity During May 2025
| · | Refinancing of Expedient for $65 million with a 5-year tenor. The loan provided to the borrower is part of a facility size of $400m Term Loan and $30m RCF. Expedient manages 15 Tier III data centres that support roughly 1,300 clients in the U.S.
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| · | An additional senior loan to Grange Backup Power Ltd for €5.4 million. The borrower is an Irish power asset linked to a data centre.
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| · | An additional senior loan to Sunrun Radcliffe for $6.0 million. The borrower is a leader in the US residential solar market. |
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No investments repaid during May 2025
Non-performing Loans
The Company continues to work towards maximising recovery from the non-performing loans in the portfolio (equal to 1.0% of NAV): There are no new announcements this month.
Top Holdings
Valuations are independently reviewed each month by PWC.
Full list of SEQI's Portfolio Holdings and SEQI Monthly Factsheet
http://www.rns-pdf.londonstockexchange.com/rns/8473M_1-2025-6-13.pdf
http://www.rns-pdf.londonstockexchange.com/rns/8473M_2-2025-6-13.pdf
About Sequoia Economic Infrastructure Income Fund Limited
| · | SEQI is the U.K.'s largest listed debt investor, investing in economic infrastructure private loans and bonds across a range of industries in stable, low-risk jurisdictions, creating equity-like returns with the protections of debt. |
| · | It seeks to provide investors with regular, sustained, long-term income with opportunity for NAV upside from its well diversified portfolio. Investments are typically non-cyclical, in industries that provide essential public services or in evolving sectors such as energy transition, digitalisation or healthcare. |
| · | Since its launch in 2015, SEQI has provided investors with ten years of quarterly income, consistently meeting its annual dividend per share target, which has grown from 5p in 2015 to 6.875p per share in 2023. |
| · | The fund has a comprehensive ESG programme combining proprietary ESG goals, processes and metrics with alignment to key global initiatives. |
| · | SEQI is advised by Sequoia Investment Management Company Limited (SIMCo), a long-standing investment advisory team with extensive infrastructure debt origination, analysis, structuring and execution experience. |
| · | SEQI's monthly updates are available here: Monthly Updates - seqi.fund/investors/monthly-updates |
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For further information please contact:
| Investment Adviser Sequoia Investment Management Company Limited Steve Cook Dolf Kohnhorst Randall Sandstrom Anurag Gupta Matt Dimond | +44 (0)20 7079 0480 |
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| Joint Corporate Brokers and Financial Advisers Jefferies International Limited Gaudi Le Roux Harry Randall | +44 (0)20 7029 8000 |
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| J.P. Morgan Cazenove William Simmonds Jérémie Birnbaum
| +44 (0)20 7742 4000 |
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| Public Relations Teneo (Financial PR) Martin Pengelley Elizabeth Snow Faye Calow
| +44 (0)20 7260 2700 |
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| Alternative Investment Fund Manager (AIFM) FundRock Management Company (Guernsey) Limited Dave Taylor Chris Hickling
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| Administrator / Company Secretary Apex Fund and Corporate Services (Guernsey) Limited
| +44 (0)20 3530 3107
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This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.
[1] Given that the dividend was announced on 17 April 2025, the ex-dividend date for the interim dividend of 1.71875 pence per share is 1 May 2025 (based on the Dividend Procedure Timetable for 2025). As such, the dividend payment is reflected in the NAV decomposition table for May 2025, instead of April 2025.
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