What HICL Does

Overview

HICL is a long-term equity investor in social, transportation and similar infrastructure projects. These investments deliver real assets, typically to public sector or quasi-public sector clients, which support the community and provide essential public services across a number of sectors. These include education, health, justice, road, rail and other accommodation requirements such as libraries, barracks and social housing.

The majority of HICL's investments are in operational projects which have successfully completed their construction phases. The portfolio comprises more than 100 projects which are primarily in the UK, but also in Continental Europe, North America and Australasia.

Investment Rationale

Projects are typically structured as long-term, availability based 'concession' contracts under a public-private partnership procurement model, with major operations outsourced to specialist providers.

This model affords a number of attractive features to investors such as HICL, principally a high degree of revenue and cost certainty backed by quality counterparties (both client and supply chain). As a consequence, HICL has substantially mitigated the operational risk in its portfolio and so enjoys stable and predictable investment cashflows from projects - often with good inflation-correlation. Investments are also considered in projects which have revenue streams linked to the usage of the asset by the end-user (referred to as demand based infrastructure), provided that the income stream can be forecast with a reasonable degree of accuracy. Further detail is provided in Business Model.

For the public sector clients, these partnerships afford a number of advantages including time and whole-of-life cost certainty, and the provision of outsourced construction, operation and maintenance services according to defined standards, as measured by Key Performance Indicators (KPIs).

Delivering Real Value

Acting through InfraRed's infrastructure team, HICL has a stewardship role for each underlying infrastructure asset. It is responsible for ensuring the quality of service delivery that the procuring clients and end-users of the asset expect from a leading infrastructure investor and operator. At the same time, HICL acquires and manages these investments with a view to preserving and enhancing value for shareholders. It is a process that requires a multitude of different skills ranging from due diligence and analytical capabilities through to specialist technical knowledge and the ability to survey and interrogate the quality of services provided in complex projects. Further detail is provided in Strategy & Investment Policy.

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    Introductory Presentation

    Access the Introductory Presentation to learn more about HICL, its portfolio and historic performance, the Investment Adviser, as well as the infrastructure asset class in general.

     

  • InfraRed Capital Partners

    InfraRed is the Investment Adviser to HICL. It is an experienced infrastructure investment manager with over US$9bn of equity under management, approximately 120 staff and 25 years’ investment experience.