Cordiant Digital Infrastructure (CORD)

Cordiant Digital Infrastructure (CORD) outperformed its ambitious 9% annual return target in just the first six months of its latest financial year. As a result, the NAV has delivered annualised returns of 13.5% in the past five years since its inception, aided considerably by capital growth from its highly concentrated portfolio of mid-sized infrastructure companies.

These strong returns reflect the managers’ ‘Buy, Build, Grow’ approach, which involves investing additional capital to existing holdings in order to support future revenue and capital growth. More recently, Portfolio developments have been incremental, with the managers continuing to diversify the portfolio by both geography and asset class. However, there has been considerable growth capex put into data centres, which arguably have strong growth potential. As a result, the portfolio’s asset class mix has modernised and diversified.

Whilst capital growth is a key differentiator for CORD in the infrastructure sector, it still pays a Dividend with a current yield of 4.1%. The dividend per share has been increased three times since inception, and is comfortably ahead of the initial IPO guidance. Revenue, as measured by their preferred AFFO metric, remains more than sufficient to cover these payments, as well as providing enough capital to support the portfolio’s ongoing growth.

Despite the strong performance, CORD continues to trade at a notable Discount to NAV. The current level of c. 24% is wider than the company’s own average during its history and wider than the average of the peer group.