Investment trust 3i Infrastructure (LON:3IN) said it had a ‘strong start’ to its new financial year and its portfolio was performing well. Manager Bernardo Sottomayor added most companies were trading in line with or ahead of expectations and the company was making new investments.
Strong start
After posting a total return towards the bottom end of its target range for the year to March 2026, FY27 has started strongly. Total income and non-income cash for the three months to end-June was £52 million, in line with expectations.
Portfolio company Infinis made ‘good progress’ with 274MW of new solar capacity under construction and 230MW added to its pipeline. Offshore communications firm Tampnet won two new contracts for deepwater development in the Gulf of Mexico.
Tampnet also refinanced its debt facilities in anticipation of future growth. 3IN said there was ‘strong demand’ to lend to its portfolio companies due to the quality of their cash flows.
Changes to the portfolio
In March, the company announced it would sell 71% of TCR, the largest independent lessor of airport ground support equipment. Since its first investment in TCR in 2016, the group had made six bolt-on acquisitions to grow the business.
The firm received the €1.14 billion from the sale, marking a 22% uplift from its 30 September 2025 valuation. It also represented a 3.5 times money multiple and a 19% gross annual 10-year IRR (internal rate of return).
While some of the proceeds of the sale were used to pay down the group RCF (revolving credit facility), 3IN has a new investment planned. This summer it expects to complete the €300 million acquisition of a majority stake in LMD, a data centre campus in Norway.
Together with investment from 3i Group (LON:III) and coinvestors managed by 3i, LMD will be 90% controlled. LMD has long-term, availability-based, inflation-linked contracts ‘providing strong revenue visibility and protection’.
Shares in 3IN sold off sharply in Q1 but staged an impressive recovery in Q2 meaning they are flat year-to-date. Today’s update hasn’t generated a big reaction, but it demonstrates the company’s ongoing commitment to producing sustainable long-term returns.
It also marks a shift from ‘old-economy’ activities like airport ground handling to ‘new economy’ activities with the investment in LMD. Together with Flag and the growing influence of Tampnet, LMD raises the profile of digital communications within the portfolio.
Most of the other holdings are in transport and logistics (ESVAGT, Oystercatcher, SRL) or the energy transition (Future Biogas, Infinis, Joulz). These are key aspects of the infrastructure theme and also offer sustainable long-term upside.
For investors who want exposure to future trends along with a mix of capital gains and income, 3i Infrastructure is a safe choice. It hasn’t shot the lights out, but over the last decade the trend has been slowly and inexorably upward.
Read the press release here: https://www.3i-infrastructure.com/investors/
