Sequoia Economic Infrastructure remains confident, monitors volatility
Sequoia Economic Infrastructure Income Fund Ltd on Monday posted net asset value growth in April, despite ‘elevated’ levels of volatility.
The Guernsey, Channel Islands-domiciled fund is run by London-based Sequoia Investment Management Co Ltd.
NAV per share was 92.27 pence at April 30, after the payment of a 1.72 pence per share dividend for the quarter ended March 31. Excluding the impact of dividend payments, NAV per share was 93.99p at the end of April, up 0.9% from 93.17p at March 31.
Sequoia’s 12-month total return amounted to 8.7% as of April 30.
Its shares traded 0.6% lower at 79.03p on Monday morning in London, and have risen 1.8% over the past year.
‘Geopolitical uncertainty remained elevated during April, notwithstanding the temporary US-Iran ceasefire announced early in the month. While this initially eased pressure on oil prices, the fragility of the agreement, proposed US tariffs on countries trading with Iran and continued Middle East tensions reinforced inflation risks and market volatility,’ Sequoia noted.
It described the direct impact on its portfolio as ‘limited’, given Sequoia’s ‘low short-term sensitivity to rising energy prices’, but said it continues to monitor secondary effects on borrowers.
At the end of April, the investment firm’s £300 million revolving credit facility was undrawn and it held £56.0 million in cash, including interest income.
Net undrawn commitments totalled £138.2 million at April 30, with £87.4 million of net deployments into new loans in May. Sequoia’s largest investment as of April 30 was ACG BidCo Ltd, representing 4.9% of its portfolio.
April saw Sequoia divest its entire holding in SL 4000 Connecticut LLC ‘at a small premium to book value’ and repurchase 9.2 million shares at an average of 79.79p each. The company’s current buyback programme remains in place, and it estimates that the scheme has added about 2.57p to NAV per share since starting in July 2022.
The company in May put $60.0 million towards new second lien financing of a US mobile power generation business, of which details will be shared in an upcoming announcement.
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