Sequoia Economic Infrastructure Income Fund Ltd on Monday reported a decrease in net asset value and total return, due to economic challenges.

The FTSE 250-listed company, which invests in income-generating economic infrastructure debt, had net assets of £1.78 billion on March 31, down 1.1% from £1.80 billion on the same date a year before.

Net asset value per share as at March 31 amounted to 100.50 pence, reflecting a 2.6% decrease from 103.18p, year-on-year.

The total NAV return for the year amounted to 3.5% versus 14% in financial 2021.

The company attributed the poorer outturn to economic challenges, namely rising inflation, higher interest rates, and the conflict in Ukraine.

‘Against the backdrop of rising interest rates across the yield curve, particularly over the final quarter of our financial year, this is a solid performance,’ Sequoia still added.

The company reached its total dividend target of 6.25p, unchanged from last year.

Looking ahead, Sequoia said that it is evaluating the risks and opportunities associated with the current economic environment.

‘[A] moderate amount of inflation is helpful for the credit quality of the companies that we lend to. This is because in many cases these companies are able to increase their revenue more or less in line with inflation, while their debts remain the same in nominal terms,’ the company said.

The company said it believes that it is well-positioned for the future.

Shares were up 0.7% at 88.02 pence each on Monday morning in London.

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