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(Alliance News) - Sequoia Economic Infrastructure Income Fund Ltd on Thursday reported a negative return in its recent financial year, amid a "volatile market".
Sequoia Economic is a London-based income fund with investments in various infrastructure sectors including transport, renewables and accommodation.
At March 31, Sequoia's net asset value was 93.26 pence per share, after dividend payments of 6.41p during the year, down from 100.50p a year prior. The company said that, other than the dividend payments, the decline in NAV primarily reflected the market-to-market effect of higher interest rates and credit spreads, balanced by interest income from investments.
Shares in Sequoia Economic were down 0.1% at 76.11p in London on Thursday morning, meaning they trade at a discount to NAV.
NAV total return for the financial year that ended March 31 swung to negative 0.9%, compared with positive 3.5% the year before. Share price total return was negative 16%, swung from positive 4.5%.
Sequoia Economic paid 6.56p per share in dividends with respect to financial 2023, up 10% from 6.25p the prior year.
"The company has remained resilient against a backdrop of an increase in credit spreads and tighter lending conditions globally, driven by interest rates which rose at almost unprecedented speed in FY23," Chair Robert Jennings commented, although he noted that "our income for the year increased due to the high proportion of floating rate investments in our diversified portfolio".
Jennings said he expects to retire from the board at some point during the next 12 months, having led the company since before its initial public offering in 2015.
Going forward, Jennings said: "We believe our economic infrastructure portfolio is well positioned in the current high interest rate environment and are taking advantage of credit markets that are favourable to debt providers.
"We have demonstrated our resilience throughout the challenges of the last eight years and, our well-diversified portfolio, growing interest income and disciplined approach to capital deployment gives us confidence for our future."
By Emma Curzon, Alliance News reporter
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