AJ Bell Money & Markets Investment Trust Show: can big dividends make up for weak share price performance? The challenges facing renewable energy and infrastructure trusts.
Nov 3, 2025
In this insightful discussion, James Carthew, a research analyst specializing in renewables and infrastructure trusts, dives into the challenges facing these sectors, including how rising interest rates impact NAVs. David Bird, manager of Octopus Renewables Infrastructure Trust, shares details about their strategic pivot toward growth and construction projects aimed at improving shareholder outcomes. Pieter Staelens discusses CVC Income & Growth's credit-focused strategy, highlighting successful opportunistic purchases that generate steady income while managing risks.
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Why Renewables And Infrastructure Are Paired
- Renewables and infrastructure funds are lumped together because both buy large private-like assets with predictable, inflation-linked cash flows.
- Both sectors are sensitive to interest rates and get priced off dividend yields, so they move similarly.
Rate Rises Crushed Valuations
- Rising interest rates forced yields on renewables/infrastructure up, cutting NAVs as future cash flows are discounted more heavily.
- That shift exposed these trusts to wide discounts versus NAV as investors found alternative yield sources.
Discounts Block Development Funding
- Trusts need cash to develop new projects but face issuance constraints when trading at discounts, forcing asset sales or dividend choices.
- Boards consider recycling cash, selling mature assets, or merging development and investment wings to fund growth.