HICL Infrastructure sells £225 million asset portfolio to Dutch pension fund

HICL Infrastructure has agreed to dispose of seven UK public-private partnership assets to Dutch pension services provider APG for a total consideration of approximately £225 million, as the investment trust continues its strategy of selective asset sales.

The London-listed infrastructure investment company announced on Monday that the portfolio comprises 50% of its investments in Southmead Hospital and Pinderfields and Pontefract Hospitals, along with the entire equity interest in four UK NHS Local Improvement Finance Trust projects and Edinburgh Schools.

The transaction price aligns with HICL’s latest audited valuation of the assets as at 31 March 2025, with the majority of proceeds to be received upon completion and a deferred element of £14 million due by June 2026. The sale is expected to complete by the end of this year, subject to standard regulatory approvals.

HICL plans to deploy the proceeds to fund its ongoing £150 million share buyback programme, fully repay its £30 million revolving credit facility, and meet existing investment commitments of approximately £110 million.

The company has been using share repurchases to address its persistent discount to net asset value, which currently stands at around 22%.

The latest disposal brings HICL’s total asset sales over the past 24 months to £725 million, significantly exceeding its previously stated target of at least £200 million of disposals by March 2026.

Following completion, the trust’s exposure to healthcare assets will reduce to 16% from 22% of gross portfolio value.

Edward Hunt, head of core income funds at InfraRed, which manages HICL, described the sale as improving “key portfolio metrics” and reflecting the firm’s ability to execute “highly targeted divestments.” He noted that the pricing underscores the company’s robust net asset value and highlights the continued dislocation between public and private infrastructure markets.

As part of the agreement, HICL has established a partnership framework with APG that provides opportunities to pursue further transactions over time and potential co-investment in new assets. InfraRed will continue managing the sold assets under a separate arrangement with APG.

The company reported solid operational performance across its portfolio during the trading period from April to August, with yield investments continuing to underpin cash generation in line with expectations. HICL remains on track to deliver its covered target dividend of 8.35 pence per share for the financial year ending March 2026.