Infrastructure asset class

Infrastructure assets typically have a low correlation with other asset classes, including listed equities, real estate and fixed income.

The quality and predictability of their cash flows tend to provide for stable returns to shareholders over time. We aim to invest across a range of economic infrastructure sectors.

Portfolio value by investment (at 31 March 2024)              

  • TCR 16%
  • ESVAGT 14%
  • Infinis 11%
  • Tampnet 9%
  • Global Cloud Xchange 9%
  • Joulz 8%
  • Ionisos 8%
  • Valorem 6%
  • SRL Traffic Systems 6%
  • Oystercatcher 6%
  • DNS:NET 4%
  • Future Biogas 2%
BLUE DOT Energy transition 42%
PINK DOT Digitalisation 22%
GREEN DOT Renewing essential infrastructure 22%
DARK BLUE DOT Demographic change 8%
Other critical infrastructure 6%

The characteristics we look for in new infrastructure investments

We look to build and maintain a diversified portfolio of assets, across a range of geographies and sectors, whilst adhering to a set of core investment characteristics and risk factors.

The Investment Manager has a rigorous process for identifying, screening and selecting investments to pursue. We look for businesses that combine a base of strong cash flow resilience (for example, contracted revenues) with high through-cycle underlying market growth fundamentals and operational improvements, and M&A opportunities, which allows us to deliver above target returns.

Although investments may be made into a range of sectors, the Investment Manager typically focuses on identifying investments that meet most or all of the following criteria and are aligned with identified megatrends:

Asset intensive business

Owning or having exclusive access under long-term contracts to assets that are essential to deliver the service.

Good visibility of future cash flows

Long-term contracts or sustainable demand that allow us to forecast future performance with a reasonable degree of confidence.

Asset bases that are hard to replicate

Assets that require time and significant capital or technical expertise to develop, with low risk of technological disruption.

An acceptable element of demand or market risk

Businesses that have downside protection, but the opportunity for outperformance.

Provide essential services

Services that are an integral part of a customer’s business or operating requirements, or are essential to everyday life.

Opportunities for further growth

Opportunities to grow or to develop the business into new markets, either organically or through targeted M&A.

Established market position

Businesses that have a longstanding position, reputation and relationship with their customers – leading to high renewal and retention rates.

Sustainability

Businesses that meet or are committed to meeting the criteria set out in our Responsible Investment policy and will work with us to enhance their ESG maturity.

About 3i Infrastructure

James Dawes, CFO, Infrastructure, speaks to AJ Bell’s Shares Magazine about 3i Infrastructure and the megatrends underpinning our strategy.

What makes 3iN different

Find out how 3iN’s portfolio of private infrastructure businesses and our active engagement with management teams makes us unique in the listed infrastructure sector.

As at 31 March 2024, the Company has a portfolio of 12 assets, valued at £3.8bn.