Managed by Stephen West and Stephen Ellis, the VT UK Infrastructure Income Fund (UKIIF) will aim to deliver a distributed yield of 5% a year by investing in listed UK infrastructure stocks.
The fund, which is UCITS IV compliant, will be the only UK-focused infrastructure fund available on fund platforms in the UK, and the only fund in the sector which will qualify for inclusion in offshore bonds, GCP said. It will offer sterling, euro and US dollar share classes.
According to Ellis, the decision to launch the fund was driven by client demand for an open-ended vehicle providing a similar cautious, uncorrelated type of return to the firm’s flagship closed-ended fund.
“There is a very significant subset of the investor universe that we are seeking to address that cannot or does not like to invest in closed ended funds,” Ellis said.
In developing the fund, the company also found interest from international IFA’s who look after British expats that wanted to repatriate some of their money through a Qrops, and other international investors who regarded the UK as a safe haven for their funds.
Infrastructure growth
Asked about the growth within the infrastructure space in the past few years, and the challenges posed to investors by its new-found popularity, Ellis admits that yields have definitely been compressed in the past few years. But, he added: “Infrastructure is a very big beast. There is a large range of assets that can be viewed as falling within the infrastructure investment remit and it continues to grow.”
Ellis is also quick to highlight the difference between the VT UK Infrastructure Income Fund and other open-ended infrastructure funds. Other such funds tend, he says, to have a large exposure to emerging markets which brings with it both currency and political risk.
