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Highlights
- SEQI’s net asset value (NAV) rose to 93.67p, delivering an annualised total return of 10.1%.
- The Fund originated £213 million in new loans during the period, maintaining a diversified and income-focused portfolio.
- Dividend payments of 3.44p per share remained fully cash-covered, supporting the Fund’s full-year distribution target.
Sequoia Economic Infrastructure Income Fund Limited (LSE:SEQI) has released its half-year results for the six months ending 30 September 2025, reporting an uplift in NAV, stable income performance and continued investment activity. The Fund said its portfolio remained resilient across the period, supported by income visibility, disciplined underwriting discipline and active capital deployment.
Sequoia Reports Higher NAV Driven by Stable Income
During the first half of the financial year, SEQI’s NAV increased to 93.67p, up from 92.55p in FY2024. This translated to an annualised NAV total return of 10.1%, exceeding the Fund’s target annual gross return range of 8–9%. The Fund distributed 3.44p per Ordinary Share in dividends during the period, aligning with its full-year target of 6.875p. Dividend coverage remained stable at 1.01x, supported by cash income generation.
Portfolio Maintains High Credit Quality and Diversification
SEQI reported that its portfolio continues to emphasise operational assets, which accounted for 88.3% of holdings, and senior secured debt, representing 57.2%. Exposure to non-performing loans fell sharply to 0.6% of NAV, compared with 5.5% in HY2024, with no new NPLs emerging during the period. The Fund reiterated that credit quality and diversification remain central to its investment approach, with ongoing focus on non-cyclical industries.
Loan Originations Strengthen Investment Activity
The Fund originated £213 million of new loans during the half-year, achieving a weighted average yield-to-maturity of 8.9%. Management noted that elevated levels of loan repayments during the period were offset through careful balance sheet management and selective use of leverage. SEQI also confirmed access to an attractive £350 million pipeline of potential investments, which it plans to pursue to maintain full deployment and minimise cash drag.
Positioning for a Lower-Rate Environment
SEQI highlighted its preparation for a potential decline in interest rates. Approximately 61.7% of its portfolio is now invested in fixed-rate instruments, including the effect of rate hedging strategies. This allocation is intended to stabilise income should interest rates decline. A shorter weighted average maturity also offers flexibility to reinvest as market spreads adjust.
Pull-to-Par Potential and Capital Management
The Fund expects further valuation recovery over time, with a pull-to-par upside of 3.1p per share projected through to September 2028. SEQI continued its share buyback programme, acquiring 17.0 million shares during the period at a total cost of £13.2 million. Since inception, the programme has retired 213.2 million shares, with ongoing adjustments based on discount levels and market conditions.
