GCP Asset Backed Income Fund Ltd. · LSE:GABI
GCP Asset Backed Income Fund — GCP Infrastructure Investments — Investor Presentation (August 2023)
27 slides from GCP Asset Backed Income Fund's investor presentation, August 2023
Slide 1: Authorised and regulated -by the Financial Conduct Auth
Authorised and regulated -by the Financial Conduct Auth
Slide 2: Important Notice
IMPORTANT NOTICE Warning This presentation (the "Presentation") has been prepared by Gravis Capital Management Limited (the "Investment Adviser" or “Gravis") andis for information purposes only. This Presentation is not intended for distribution to, or use by, any person or entity in any jurisdictio
Slide 3: Presenters
PRESENTERS Philip Kent - Director Phil is a Director of Gravis and Adviser to GCP Infrastructure Investments Ltd. Phil joined Gravis in 2015 from Foresight Group where he was responsible for investments in the waste and renewable sectors, including large waste wood combustion projects and a pipeline
Slide 4: Introduction, Portfolio, Macro Update, Financial Update, Conclusion
Introduction Portfolio Macro Update Financial Update Conclusion
Slide 5: Introduction
INTRODUCTION Gravis
Slide 6: Investment trust that invests in UK infrastructure
Investment trust that invests in UK infrastructure that benefits from public-sector backed cash flows, with a focus on debt. The Company: * pays an attractive risk-adjusted income; * is diversifiedacross a range of different infrastructure sectors; and * has a focus on the preservation of capital. E
Slide 7: Gravis' Lending History
GRAVIS’ LENDING HISTORY Gravis has a 13-year history of lending into the infrastructure and asset-backed sectors. Downward aggregate revaluations since IPO (annualised): 0.31%! Maturities of 5-40 yrs £2.7bn invested Rates of 6- 10% Social Infrastructure Property Asset Finance Social Housing Energy P
Slide 8: NAV Bridge - June 2023
NAV BRIDGE - JUNE 2023 Movements driven primarily by increases to discount rates across the portfolio, in combination with decreases in short-term futures power prices. Long-term power price forecasts and electricity price hedging served to offset some of the downward movement. <2.0% Continued stron
Slide 9: Portfolio
PORTFOLIO Gravis
Slide 10: Portfolio Update
PORTFOLIO UPDATE A mature, diverse and operational portfolio of UK infrastructure projects that is well positioned to benefit from the macro trends of population dynamics, decarbonisation and energy security. 9 Healthoare Gas peaking Education Electric vehicles "yro Waste (PPP) Leisure Housing (PPP)
Slide 11: Portfolio Update (cont.)
PORTFOLIO UPDATE (CONT.) A mature, diverse and operational portfolio of UK infrastructure projects that is well positioned to benefit from the macro trends of population dynamics, decarbonisation and energy security. Portfolio by annualised yield >10% Electricity (EV Charging) Capacity mechanisr Hea
Slide 12: Portfolio Update (cont.)
PORTFOLIO UPDATE (CONT.) Returns requirements for new investment has increased significantly in recent months. Any investment decisions must be weighed against the investment opportunity offered by buying back shares and the benefits of repaying the RCF. £113.9m £114.3m ing the period, the £105.7m M
Slide 13: Average Capital Structure by Sector
AVERAGE CAPITAL STRUCTURE BY SECTOR The Company has investments across a number of asset classes and within different elements of the capital structure: senior, subordinated or equity. Anaerobic Onshore Hydro- Geo- Social Flexible Electric PPP/PFI ae Biomass wind Solar electric thermal ae generation
Slide 14: Macro Backdrop
MACRO BACKDROP Gravis
Slide 15: GCP Infrastructure Share Price
GCP INFRASTRUCTURE SHARE PRICE The Company’s share price has moved to a significant discount to the net asset value, notwithstanding some attractive defensive portfolio characteristics. Portfolio strengths Price (ps) Daily volume (m) 120 10 * Mature and operational portfolio; 115 m0 * Have proven va
Slide 16: Electricity Price Backdrop
ELECTRICITY PRICE BACKDROP A period of significant reductions in near-time price expectations, driven by high levels of gas storage and LNG imports. September 2023 monthly futures contract Valuation forward curve (GB market) 180 700 n — — 31/03/2023 160 fia \ —— 30/06/2023 _ —— 31/07/2023 600 140 \
Slide 17: Interest Rates
INTEREST RATES The rate environment is an investment opportunity for the Company, with protection for the portfolio coming from partial inflation linkage on c. 47% of the investments. K 10-year gilt yield histo 6.0 co fom 2 3 a fom ® a oO 5 oO Q < Q < a. ° g 60 & 43 2 50 5.0 g 3.4 & 40 ' IPo: B40 zo
Slide 18: Financial Update
FINANCIAL UPDATE Gravis
Slide 19: Highlights of the Period
HIGHLIGHTS OF THE PERIOD - Newinvestment of c. £0.6m to finance the roll-out of co-located solar powered parking canopies and EV charging points as part of anew developer relationship; + Follow-on investment (£1m) ina portfolio of PFI projects in Scotland; + Prioritisation of buybacks and further de
Slide 20: Loan Payments
LOAN PAYMENTS The Company expects c. £240m to be repaid over the next 3 years on a scheduled basis, providing the opportunity for a ‘re-set’. Gravis has historically been able to exceed scheduled turnover of the portfolio through proactive refinances / disposals. Forecast loan cash flows (undiscount
Slide 21: Financial Update
FINANCIAL UPDATE Dividend coverage — 6 months to 31 March 2023 id coverage (£m) Capitalised interest (unplanned) VW + 1.09x covered in period Capitalised interest (planned) 8.3 ee 88T * Removes pull to par and impact of revaluations * Based on interest accruals * c.£4.75m of capitalised interest rec
Slide 22: "Pull to Par" Impact
“PULL TO PAR” IMPACT Presented below is an illustrative example of a simple debt instrument, and the impact of “pull-to-par” effects on valuation. 10% discount rate 8% discount rate Illustrative debt cashflows through time 1 Coupon (8%) [ll Utilisation / Repayment Illustrative balance sheet impact t
Slide 23: Conclusion
CONCLUSION Gravis
Slide 24: Environmental, Social, Governance (ESG)
ENVIRONMENTAL, SOCIAL, GOVERNANCE (ESG) Environmental \ / 1,429 GWh! “oy 438,000! a 66% Renewable energy exported by Equivalent homes powered by Portfolio by value contributing portfolio assets portfolio assets to green economy Social ray m 7A £2.8m 63 | 2,000 Renewables contribution to Investment i
Slide 25: SWOT Analysis
SWOT ANALYSIS Strengths Weaknesses * Dividend yield of c.9.2% at current share price + ‘Hangover’ from historic AD / biomass issues — BUT materially Well diversified portfolio of established assets, with strong resolved ESG credentials * Social Housing contagion — BUT good quality early adopted Cons
Slide 26: Contact Information
Gravis Capital Management Limited 24 Savile Row London WIS 2ES www.graviscapital.com Contact Information Philip Kent Philip.kent@graviscapital.com 020 3405 8512 Ed Simpson ed.simpson@graviscapital.com 020 3405 8528 Max Gilbert max.gilbert@graviscapital.com 020 3405 8515 Cameron Gardner cameron.gardn
Slide 27: Gravis
Gravis INVESTMENT IDEAS FOR THE LONG RUN
GCP Infrastructure Investments — Investor Presentation (August 2023) on 6ix