BBGI Global Infrastructure (BBGI)

BBGI Global Infrastructure (BBGI) owns a globally diversified portfolio of low-risk availability-based infrastructure projects, focussed on highly rated infrastructure investment destinations such as the UK, Canada, Continental Europe, Australia, and the US, with AAA/AA credit ratings. The trust currently yields c. 6.6%, while comparable government bonds yield c. 4%. Unlike fixed-rate government bonds, the Portfolio has contractual links to inflation and BBGI has achieved a progressive dividend since its IPO in 2011, while the team estimate that even with no further investments, the trust could continue with a progressive Dividend for another 15 years.

The current Discount of c. 12% is narrower than the peer group average of 15%. Over the last five years, BBGI's NAV total return of 43% has exceeded the peer group average of 26%. Annualised dividend growth since IPO in 2011 is 3.4%. In 2023 BBGI grew its dividend by 6% and is on target to do the same again in the year to 31/12/2024, illustrating the benefit of its inflation-linked contracts and the defensive nature of the portfolio. Since IPO, BBGI’s 8.5% annualised NAV total return is comfortably ahead of its long-term 7-8% target return.

BBGI is net cash at a company level, although as is usually the case with infrastructure assets, individual assets are geared. In almost all cases BBGI’s portfolio assets are geared using fixed-rate debt that amortises over the life of the specific asset and thus there is almost no refinancing risk.

BBGI is internally managed, meaning that the Management team are all employees of the trust, and it is their sole focus. It also means BBGI has relatively low Charges compared to the peer group.