GCP Asset Backed Income Fund Ltd. · LSE:GABI

GCP Asset Backed Income Fund — VT Gravis Digital Infrastructure Income Fund — Investor Presentation (February 2023)

39 slides from GCP Asset Backed Income Fund's investor presentation, February 2023

  1. Slide 1: VT Gravis Digital Infrastructure Income Fund

    VT GRAVIS DIGITAL INFRASTRUCTURE INCOME FUND February 2023

  2. Slide 2: Contents

    CONTENTS 3 The Opportunity 10 Digital Infrastructure 17 Introduction to the Fund 31 Appendix 2

  3. Slide 3: The Opportunity

    The Opportunity Gravis GRAVIS DIGITAL INFRA

  4. Slide 4: The Fourth Industrial Revolution

    THE FOURTH INDUSTRIAL REVOLUTION 1780s 1870s 1960s Now 1st Industrial 2nd Industrial 3rd Industrial 4th Industrial Revolution Revolution Revolution Revolution Mass Automated New Mechanisation Production Production Technologies Steam engine powered Electricity and oil-power Computer and internet AI,

  5. Slide 5: Revolutionising Our Lives

    REVOLUTIONISING OUR LIVES 4th Industrial Revolution Work Play Live Data Centres Digital Networks Telecoms 5G Networks Urban Logistics E-commerce Towers Facilities Fulfilment Centres 5

  6. Slide 6: The Perpetual Data Cycle

    THE PERPETUAL DATA CYCLE More data drives the creation of more apps New technologies drive incremental data creation: More apps create more data • Smart home/office/city More apps and more data requires more bandwidth • Semi-autonomous/autonomous manufacturing More bandwidth requires more digital in

  7. Slide 7: Key Digitalisation Trends

    KEY DIGITALISATION TRENDS Accelerating growth in data volumes and e-commerce penetration Data E-Commerce Penetration Volume of data/information created, captured, Online sales as % of total retail sales* 2012, 2019 and copied, and consumed worldwide1 2021 160 30% 140 25% 120 Volume of Data (zettabyt

  8. Slide 8: Digital Infrastructure Assets

    DIGITAL INFRASTRUCTURE ASSETS Digital infrastructure companies enable the digital world and are distinct from technology companies. DIGITAL SUB-SECTORS Communications Data Networks Logistics Technology Communication towers Data centres Fibre networks & Logistics warehouses Software Hardware Payment

  9. Slide 9: A Growing, Liquid Universe

    A GROWING, LIQUID UNIVERSE Growth of the digital infrastructure sector is expected to continue, driven by both the market and its participants Combined market cap has increased eight-fold1 in the past decade 655 700 130 465 500 389 125 120 262 274 300 214 115 110 125 149 98 112 110 110 72 71 105 100

  10. Slide 10: Digital Infrastructure

    Digital Infrastructure Gravis GRAVIS DIGITAL INFRA

  11. Slide 11: Digital Infrastructure Business Models

    DIGITAL INFRASTRUCTURE BUSINESS MODELS Moving from an analogue world to a digital world creates rental income opportunities Theme Communications Data Networks Logistics Physical asset Leasing space for Leasing communications Leasing space for Leasing space for communications infrastructure or server

  12. Slide 12: Communications Towers

    COMMUNICATIONS TOWERS Communication towers support antennas for telecommunications, wireless internet and broadcasting. Key Facts Unique Mobile Users3 • Mobile network data traffic grew 42% between Q3 2020 and Q3 20211 5.29bn 5.20bn 5.13bn • 302 tower companies own 3.66m of the worlds 5.08m 5.00bn t

  13. Slide 13: Data Centres

    DATA CENTRES Physical facilities that house the computer systems needed to store, process, and disseminate data and applications. Key Facts Number of internet users worldwide from 2009 • London colocation market supply stands at 839 MW IT to 2021, by region (in millions)3 load, the largest market in

  14. Slide 14: Fibre Optics and Smart Grid Networks

    FIBRE OPTICS AND SMART GRID NETWORKS Fibre Optics Smart Grids • Fibre-optic cable can be made up of a few, to hundreds • An electricity network enabling a two-way flow of electricity. of optical fibres within a plastic casing. • Smart grids enable artificial intelligence to detect faults and • Terre

  15. Slide 15: Logistics Facilities

    LOGISTICS FACILITIES E-commerce companies are increasingly using automated big box warehouses to store and dispatch goods. The trend towards ever shorter delivery times is driving increasing demand for urban logistics facilities. Key Facts Online Sales as a Percentage of Total Retail • The growth of

  16. Slide 16: Listed Digital Infrastructure Champions

    LISTED DIGITAL INFRASTRUCTURE CHAMPIONS Developed market listed companies championing the digital infrastructure universe Market Cap – £90.9bn Market Cap – £24.4bn Market Cap – £16.2bn Market Cap – £3.4bn IPO Date – November 1997 IPO Date – June 1995 IPO Date – December 1949 IPO Date – October 1993

  17. Slide 17: Introduction to The Fund

    Introduction to The Fund Gravis GRAVIS DIGITAL INFRA

  18. Slide 18: Fund Overview & Objectives

    FUND OVERVIEW & OBJECTIVES Objectives Limits within which the Fund is managed To achieve capital growth through market cycles1 Minimum of 16 holdings – currently 29 holdings* Aiming to deliver c.3% dividend yield2 Subject to UK UCITS V regulations Inflation-linked characteristics 5/10/40 weighting r

  19. Slide 19: Proven Investment Process

    PROVEN INVESTMENT PROCESS FACTORS DRIVING ACTIVE DISCRETIONARY INVESTMENT DECISIONS FUND MANAGEMENT CONSTRUCTION Ensure diversification & COST Attractive valuation across the global digital AWARENESS infrastructure sector Seeks opportunities to through security selection minimise the entry price Inf

  20. Slide 20: Portfolio Construction – Liquidity and Quality

    PORTFOLIO CONSTRUCTION – LIQUIDITY AND QUALITY Global Digital Infrastructure c.125 Listed Companies Liquid & Tradable 75+ Listed Companies Focused Digital Infrastructure 70+ Listed Companies >£650bn combined market cap >£2bn average daily volume VT Gravis Digital Infrastructure Income 30+ Investment

  21. Slide 21: Portfolio Construction – Security Selection Is Key

    PORTFOLIO CONSTRUCTION – SECURITY SELECTION IS KEY REITs can be worth much more than the external valuer’s assessment Operating platforms Property valuation Valuers assign underappreciated. is an art. no portfolio premium2. NAVs don’t capture The net asset value (NAV) is NAVs just sum economies of s

  22. Slide 22: Portfolio Construction – Building a Diversified Portfolio

    PORTFOLIO CONSTRUCTION – BUILDING A DIVERSIFIED PORTFOLIO The Fund invests in multiple REITs, which own or invest in a diversified pool of properties VT GRAVIS DIGITAL INFRASTRUCTURE INCOME FUND Portfolio of REITs & Crown Castle Cogent Comms Keppel DC REIT Goodman Cellnex Telecom Equinix Inc 40,000

  23. Slide 23: Inflation Proofing: Long Leases and Rent Escalators

    INFLATION PROOFING: LONG LEASES AND RENT ESCALATORS 100% 34% 66% CPI/RPI-linked Income 96% 4% Fixed Escalators 1% Open Market Income 99% Hybrid 100% 15%1 85%1 99% 1% 89%2 11%2 41% 6% 53% 54% 10% 28% 8% 0 2 4 6 8 10 12 14 Weighted Average Unexpired Lease Term (WAULT) 1 For the tower business only 2 E

  24. Slide 24: Inflation Proofing: Income Growth and Fixed Rate Debt

    INFLATION PROOFING: INCOME GROWTH AND FIXED RATE DEBT Rents Debt c.70% of the portfolio has either fixed uplifts or inflation- c. 77.4% fixed rate debt linked escalators c. 2.1% weighted average cost of debt c. 6.1 years average debt tenor Av. Cost of Av. Debt % Fixed or Investment Sector Rental Ind

  25. Slide 25: Attractive Development Pipelines

    ATTRACTIVE DEVELOPMENT PIPELINES Development pipelines deliver superior returns to investors in specialist REITs1 Fund Underlying Asset Exposure2 Developments, 19.1% Income Producing Assets, 80.9% MC Digital Realty Data Centre, Tokyo - MCC Mitaka. High energy efficiency of PUE: 1.22 Developments Est

  26. Slide 26: Funding Future Growth

    FUNDING FUTURE GROWTH Digital infrastructure universe has grown, with c. £25bn of equity issuance during the past three years Next generation digital infrastructure REITs have attracted private equity buyers with c. £43bn of M&A The Fund has already benefitted from 4 private equity takeovers and 1 p

  27. Slide 27: Private Equity Acquiring Public Equity

    PRIVATE EQUITY ACQUIRING PUBLIC EQUITY The Fund has benefited from private equity takeover activity Announcement Takeover Portfolio Holding Bidder Date Premium June 2021 +21% November 2021 +25% March 2022 +59% May 2022 +18% June 2022 +32% GIC and Dream Industrial REIT November 2022 +31% GIP and KKR

  28. Slide 28: Portfolio Exposure and Top 10 Holdings

    PORTFOLIO EXPOSURE AND TOP 10 HOLDINGS Portfolio as at 31 January 2023 Company Holding Sector breakdown Prologis Inc 8.16% Logistics 52.9% American Tower Corp 7.62% Towers 23.4% Data centres 15.1% Goodman Group 6.15% Other 8.2% Cash 0.3% Equinix Inc 5.48% SEGRO PLC 5.23% SBA Communications Corp 5.03

  29. Slide 29: Reliable Distributions and Cost Savings

    RELIABLE DISTRIBUTIONS AND COST SAVINGS High single-digit trailing annualised dividend growth Dividends Quarterly since inception* to 31 December 2022 Q1 2021 1.2196p Q2 Q3 2022 2.5141p Q4 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Cost Savings Since inception, the Fund has made savings of 42bps by investing c. £1

  30. Slide 30: Performance Since Launch

    PERFORMANCE SINCE LAUNCH Performance from 31 May 2021 to 31 January 2023 135 MSCI World Infrastructure MSCI World IMI Core Real Estate 130 VT Gravis Digital Infrastructure Income Fund C Acc 125 120 115 110 105 100 95 90 May 21 Jul 21 Sep 21 Nov 21 Jan 22 Mar 22 May 22 Jul 22 Sep 22 Nov 22 Jan 23 Ret

  31. Slide 31: Appendix

    Gravis GRAVIS DIGITAL INFRA

  32. Slide 32: Fund Investment Team

    FUND INVESTMENT TEAM Matthew Norris, CFA - Fund Adviser & Director of Real Estate Securities Matthew has over two decades investment management experience and specialises in real estate securities. He was previously at Grosvenor with responsibility for investing in global real estate securities incl

  33. Slide 33: Key Terms

    KEY TERMS VT Gravis Digital Infrastructure Income Fund Fund Size £42.36m Yield (C Inc GBP) 2.46% (as at 31 January 2023) Share Classes Income & Accumulation Minimum Investment C: £100 | I: £10,000,000 Annual Management Charges C: 0.80% | I: 0.70% Fund operating charges* C: 0.80% | I: 0.70% Synthetic

  34. Slide 34: Gravis Responsible Investment

    GRAVIS RESPONSIBLE INVESTMENT Gravis’ Commitments • Committed to running operations on a carbon-neutral basis by 2023 • Signatory to the Principles for Responsible Investment since January 2019 • Participant in the UN Global Compact Network • Abide by the UK Stewardship Code 2020 • Working towards a

  35. Slide 35: Platforms and Wrappers

    PLATFORMS AND WRAPPERS Available on the following platforms Suitable for Aegon Nucleus Direct investors Allfunds Old Mutual/Quilter SIPPs Aviva Pershing ISAs Barclays Raymond James Charities Canada Life Seven IM Companies Citi Bank Standard Life Wrap Offshore Bonds Close Brothers Standard Life / Ele

  36. Slide 36: Contact Information

    CONTACT INFORMATION Investment Manager and Dealing Valu-Trac Investment Management Limited Valu-Trac Dealing 01343 880217 01343 880344 digitalinfrastructure@valu-trac.com Investment Adviser Matthew Norris Fund Adviser, Director of Real 020 3405 8553 matthew.norris@graviscapital.com Estate Securities

  37. Slide 37: Investment and Distribution

    INVESTMENT AND DISTRIBUTION Investment Manager Investment Advisor Distribution Valu-Trac Investment Management Gravis Advisory Ltd. Gravis Advisory Ltd. Ltd. i. Gravis Advisory Ltd is owned and i. The team of five has assisted in i. Valu-Trac Investment managed by Gravis Capital raising over £3bn si

  38. Slide 38: Important Notice

    IMPORTANT NOTICE WARNING: The information in this Report is presented by Valu-Trac using The information provided is "as is" without any express or implied warranty all reasonable skill, care and diligence and has been obtained from or is of any kind including warranties of merchantability, non-infr

  39. Slide 39: Investment Ideas for the Long Run

    INVESTMENT IDEAS FOR THE LONG RUN 39

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