Strategy and investment policy
The Company intends to hold its infrastructure investments for the long-term.
The asset managers in the Investment Adviser's team take an active role managing the investments to ensure value is preserved and enhanced. They sit on each PFI/PPP project company's board and play an active role in the management of the project. Value enhancements are identified in performance plans for each project. These plans cover incremental revenue opportunities, cost savings, treasury management and financial efficiencies. Efficiencies and savings will only be implemented where they do not impact on either the services being provided or the quality of the service level delivery.
The Group continues to pursue new investments. The Board and the Investment Adviser continue to believe that it is prudent to selectively focus on new investment opportunities with broadly similar revenue and risk profiles to the existing portfolio. Revenues need to be contractual or regulated and costs need to be certain. Where services are subcontracted, specific attention is paid to the counter-parties' ability to perform.
Current target assets include:PFI/PPP/P3 projects in the UK, Europe, North America and Australia (both operational and in their construction phases)
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Operational renewable energy projects such as wind farms, solar parks or hydro-electric schemes, where there are suitable contractual structures in place, enabling the Group to secure long-term income streams comparable in nature to those in PFI/PPP/P3 projects. A number of these schemes have now been developed in Europe with established contractual tariff regimes
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Regulated utilities. To date, the Company has passed up investment opportunities on the grounds of size and pricing. However, opportunities to acquire stakes in regulated businesses are now expected to arise at acceptable returns
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Selectively, debt funding in infrastructure projects where it is attractively priced and appropriately structured
At the present time, the Company is unlikely to acquire investments in assets such as toll roads, airports and ports since the ability to forecast revenues and determine appropriate valuations remains difficult.
Quasi-infrastructure investments in assets like ferries, motorway service stations and care homes are outside the Group's investment policy and therefore will not be considered.
Investment Policy
To learn more about HICL's investment policy, please view the attached document:
