Strategy
Investment objective
Sequoia Economic Infrastructure Income Fund’s investment objective is to provide investors with regular, sustained, long term distributions and capital appreciation from a diversified portfolio of senior and subordinated economic infrastructure debt investments.
Clearly defined jurisdictions
Sequoia Economic Infrastructure Income Fund is focused on mature, investment grade rated jurisdictions (UK, Western Europe, North America, Australia and New Zealand). This gives the Fund’s Investment Adviser sufficient flexibility to find suitable investment opportunities from markets where its capital can command a premium whilst maintaining strong geographical diversity.
Active risk mitigation strategy
The Fund principally invests in operational projects with a proven track record and stable cash flows, spread across 8 sectors and 25 sub-sectors, reducing exposure to any one sector or business cycle.
It aims to capture the “illiquidity premium” offered by private debt investments, with select exposure to liquid, publicly traded debt.
Senior debt accounts for at least half of the portfolio with enhanced risk-adjusted returns from mezzanine debt investments. All investments are supported by an equity cushion of typically 20% or more, to absorb any unexpected losses. Over half of the portfolio is floating rate or index-linked to mitigate interest rate risk.
The Fund undertakes an FX hedging strategy to hedge substantially all of its capital and NAV in addition to interest income. Approximately 99% of the Fund’s NAV consists of either Sterling assets or is hedged into Sterling.
The Fund is also subject to a number of concentration limits, including a 20% maximum exposure to assets that are in construction, to maintain a diversified portfolio.
