HICL Infrastructure (HICL)

Since its pioneering IPO two decades ago, HICL Infrastructure (HICL) has established itself as the leading core infrastructure trust, generating an NAV total return of 8.5% p.a. through different cycles, from both income and capital growth. A recent period of static dividends ended in the financial year ending 31/03/2026, and HICL’s board expects Dividends to 31/03/2028 to grow at an annualised 1.8%, while maintaining dividend cover at 1.1x.

Since HICL’s IPO, the infrastructure landscape has evolved and so has HICL, adding more diversified sources of return through different types of infrastructure across several geographies, alongside projects in different sectors and, selectively, at an earlier stage. Active management has also played a role, through project optimisation and judging when investments are ready for disposal. Increasingly, HICL’s investments, such as New Zealand’s FortySouth mobile towers business, are operating companies with capacity to grow, while retaining the key infrastructure characteristic of long-term stable and contracted revenues. HICL has therefore come a long way since its beginnings as a predominantly UK PFI investor.

In July 2026, the HICL team set out a detailed plan that, at a headline level, will gradually increase target medium-term returns from the 7–8% range set at IPO in 2006 to 10%. This builds on their record and is expected to be achieved while maintaining dividend growth and cover. Disposals of maturing assets and excess cashflows will be partly used to increase exposure to the new class of ‘enhancer’ assets, while c.80% of HICL’s portfolio is expected to remain in the familiar ‘yielder’ and ‘grower’ categories that have powered its long-term performance. This carefully thought-out plan reflects today’s long-term infrastructure opportunity landscape and, in the Portfolio section, we look at how HICL’s long-term performance includes significant contributions from both higher-returning investments and active management. The revised strategy could, therefore, be seen as a natural evolution of the team’s existing strengths and track record in a higher-rate environment.