Half-year Financial Report

Sequoia Economic Infra Inc Fd Ld

28 November 2025

 

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Fund")

Strong first half performance

Half Year Results for the financial period ended 30 September 2025

Financial Highlights to	30 September 2025	31 March 2025
Total net assets	£1,440,762,604	£1,439,188,600
Net Asset Value ("NAV") per Ordinary Share*	93.67p	92.55p
Ordinary Share price*	77.90p	78.30p
Ordinary Share discount to NAV	(16.8)%	(15.4)%
Earnings per Ordinary Share	4.40p	4.26p
Dividends declared	3.4375p	3.4375p
Annualised dividend yield	8.8%	8.6%
ESG score of the portfolio**	65.44	64.70

* Cum dividend

** As measured by the in-house proprietary scoring methodology

KEY HIGHLIGHTS

·    Increased NAV driven by steady, predictable interest income and resilient credit performance

o  NAV increased 1.12p to 93.67 (FY2024: 92.55); annualised NAV total return of 10.1%, in excess of the Fund's target annual gross return of 8-9%

o  Dividends of 3.44p per Ordinary Share, consistent with full-year target dividend of 6.875p; dividend remains fully cash covered by a factor of 1.01x (FY2024: 1.00x)

·    Maintained robust, diversified portfolio credit quality, while targeting investments yielding in excess of 9%

o  Prioritising operational assets (88.3% of portfolio), senior secured debt (57.2% of portfolio), and non-cyclical industries

o  Reduced proportion of NPLs to 0.6% of NAV (HY2024: 5.5%) and no new NPLs recorded during the period

·    Originated £213 million of new loans over the period, at a weighted average yield-to-maturity of 8.9%

o  Proactive balance sheet management following higher than usual levels of loan repayments

o  Use of leverage to ensure the Fund remains fully invested to minimise cash drag and take advantage of attractive £350m pipeline of potential investments

·    Well positioned for falling interest rates with 61.7% of the portfolio in fixed rate investments, including the effect of interest rate hedges (FY2024: 58%), locking in current higher interest rates for longer

o  Protecting the Fund's income, and dividend cover, should interest rates fall

o  Shorter weighted average maturity, increasing reinvestment flexibility as spreads evolve

·    Further positive "pull-to-par" effects will be recognised over time

o  A substantial amount of unrealised valuation decreases that were caused by the rapid increase in term rates over recent years are likely to be reversed

o  Pull-to-par upside of 3.1p per share (to 30 September 2028)

·    Continued proactive management of share price discount to NAV with share buyback programme

o  Maintained balanced but flexible approach to capital allocation with 17.0 million Ordinary Shares purchased over the period at a total cost of £13.2 million

o  213.2 million Shares repurchased since the beginning of the programme

o  Programme adapts based on portfolio liquidity, discount to NAV and other market factors

·    ESG score of the portfolio increased, rising to 65.44 (FY2024: 64.70)

o  Driven by selective investment activity and steady progress of the Fund's borrowers in enhancing their sustainability performance and reporting

James Stewart, Chair, commented:

"SEQI's strong performance over the first half reflects the resilience of our diversified portfolio and the stability of our income generation, despite challenging market conditions. We expect dividend cover to strengthen over the second half, primarily due to the timing of income recognition and as we redeploy repaid capital into higher-yielding opportunities.

We remain frustrated by the current level of discount and, although we do not believe it reflects SEQI's long-term prospects, the resilience of our investment portfolio or our ability to generate attractive returns, reducing the discount remains a Board priority. We will continue to balance the use of available cash, including proceeds from loan repayments, between new originations and share buybacks.

As global demand for infrastructure capital remains high, we will maintain our disciplined approach to investing in our active pipeline of high-quality opportunities and continue to deliver sustainable value for shareholders."

Randall Sandstrom, Director and CEO/CIO, SIMCo, said:

"The combination of easing short-term rates and a higher for longer outlook create a favourable environment for SEQI's absolute return strategy. In addition, improving asset valuations and reinvestment into higher-yielding opportunities are expected to support future returns."

INVESTOR PRESENTATION

The Investment Adviser will host a virtual presentation on the interim results for investors and analysts today at 9.00am. There will be the opportunity for participants to ask questions at the end of the presentation. Those wishing to attend should register via the following link: https://stream.brrmedia.co.uk/broadcast/6917005627ca940014469918

Copies of the Interim Report and Accounts will shortly be available on the Company's website www.seqi.fund and on the National Storage Mechanism.

For further information, please contact:

Sequoia Investment Management Company Randall Sandstrom Steve Cook Dolf Kohnhorst Anurag Gupta	[phone]
Jefferies International Limited (Corporate Broker & Financial Adviser) Gaudi Le Roux Harry Randall	[phone]
J.P. Morgan Cazenove (Corporate Broker & Financial Adviser) William Simmonds Rupert Budge	[phone]
Teneo (Financial PR) Elizabeth Snow Rob Yates Colette Cahill	[phone] [e-mail]
Apex Fund and Corporate Services (Guernsey) Limited (Company Secretary) Aoife Bennett James Taylor	[phone]

CHAIR'S STATEMENT

It is my pleasure to present to you SEQI's Interim Report for the six‑month period ended 30 September 2025.

Overall, the portfolio's performance has been strong in the first half of this financial year, supported by steady, predictable interest income and resilient credit performance.

The Fund's NAV per share rose by 1.12p, or approximately 1.2%, from 92.55 to 93.67, driven in part by the strong interest income of the portfolio. SEQI paid dividends of 3.44p per Ordinary Share during the first half, consistent with our full-year target dividend of 6.875p, resulting in a total NAV return of 5.0% (not annualised).

This performance was stronger than that of comparable debt investments such as leveraged loans and high-yield bonds, as well as gilts, over the same period.

The discount to NAV widened from 15.4% to 16.8% during the period, which, although it compares favourably with SEQI's broader infrastructure investment trust peer group that ended the period trading at an average discount of 19.2%, remains disappointing. Managing SEQI's discount to NAV remains a significant focus for the Board and is discussed in more detail below.

Portfolio performance

The strong NAV performance reflects the portfolio's solid and resilient credit performance and ability to generate income. There were no new non-performing loans ("NPLs") recorded during the period. Efforts continue to maximise value from the remaining legacy NPLs, which now represent only 0.6% of the portfolio as at 30 September 2025 (compared to 5.5% a year ago). This is testament to the Fund's prudent valuation policy and to the Investment Adviser's ability to protect value and maximise recovery. Given the Fund's high-yield investment strategy, it is to be expected that a small number of loans will occasionally underperform.

In total, 15.4% of the portfolio (including NPLs) is subject to our enhanced monitoring practices (15.5% as at 30 September 2024). The largest exposure in this category, representing 6.6% of our portfolio, is to Active Care Group ("ACG"), a UK national provider of specialist health accommodation and complex care services. Following the restructuring of the business in May 2024, our investment in ACG comprises a senior secured loan to the operating company, a loan to its parent company, and holding of the majority of its equity capital. Over the period of our equity ownership, ACG has made meaningful operational and financial progress against its turnaround strategy and is implementing a multi-year asset optimisation programme.

Managing SEQI's balance sheet

We have seen an exceptionally high level of loan prepayments over the first half of the year: £226 million compared with £84 million for the whole of the previous financial year. The predominant reason was borrowers taking advantage of tighter lending margins in the leverage-loan and high-yield bond markets.

Many of these prepayments were anticipated by the Investment Adviser, and the Fund was able to prepare for the loss of these loans by drawing on its revolving credit facility ("RCF") ahead of time to invest in new opportunities from our healthy pipeline, and then repaying the facility in full shortly after the period end using the proceeds from the prepayments. Over the period, we originated £213 million of new loans, at a weighted average yield-to-maturity of 8.9%.

The ability to source, carry out effective due diligence and execute new loans is a fundamental part of SEQI's value proposition for our Shareholders. Since its IPO, the Fund has made over 260 debt investments, deploying over £5.2 billion across a wide range of infrastructure sectors. Over half have been either proprietary (with SEQI as sole lender and arranger) or in small club deals (where SEQI has significant influence in the structuring and pricing of the loan).

The scheduled and early repayment of loans is a natural feature of portfolio lending and is factored into our operating model. Provided the Fund is properly prepared, the return of capital offers a strategic advantage by allowing capital to be reallocated in a meaningful way between new loans and share buybacks and to generate significant fees while allowing the Investment Adviser to reposition the portfolio in new or undervalued sectors.

Share discount and capital allocation

The Board remains disappointed and frustrated by the persistent discount to NAV. We do not believe that the current levels reflect SEQI's long-term prospects, the resilience of its investment portfolio or its ability to generate attractive returns for our Shareholders.

Investment trusts are an important part of the UK's investment landscape, however sentiment has weighed on the broader sector in recent years. More joined-up policy and regulatory support is needed for the sector to support a recovery in sentiment, and to ensure they continue contributing meaningfully to the wider UK economy.

Although we believe that the main reason for SEQI's discount relates to the wider sentiment impacting the investment trust sector, reducing the discount remains a core priority focus and objective for the Board.

As part of this focus, we have been pursuing a strategy to market the Fund to new investors. Our joint brokers, J.P. Morgan Cazenove ("JPM Cazenove") and Jefferies International Limited ("Jefferies"), have been arranging meetings and an ongoing programme of investor roadshows in the UK and internationally. We have also successfully increased our retail investor base, supported by Kepler Trust Intelligence, and we are pleased that the proportion of retail investors on the register has grown over the past 12 months.

SEQI, as a debt fund, differs from many other investment companies in the infrastructure sector, in that our capital recycles much more rapidly. How we allocate our free capital is a significant consideration for the Board. We believe in a balanced approach, investing in new opportunities in the infrastructure debt market, returning capital to our Shareholders via share buybacks, and at times repaying our RCF. 

In the last six months we have bought back 17.0 million Ordinary Shares, on top of 213.2 million Ordinary Shares purchased since July 2022, at a total cost of £13.2 million. Buying back shares can be an attractive economic proposition with a financial reward that only strengthens as the discount widens, while providing secondary market liquidity.

However, an important consideration is to avoid the shrinkage of the Fund in real terms. There are benefits of scale for a private debt fund, in terms of being able to source more attractive infrastructure investments, execute larger investments efficiently and retain the core components required for a stable NAV product with a strong income focus to support the dividend. Whereas a smaller fund may result in reduced diversification and a lower maximum deal size, which may restrict us from supporting our target equity sponsors. Scale also ensures that secondary market liquidity in our Ordinary Shares remains strong, which is important for attracting and retaining investors.

If unwarranted levels of discount remain, we expect to continue buying back shares as appropriate. We will continue monitoring best practice in the market and actively review all available options, engaging with our Shareholders and adopting an approach that seeks to take into account the views of all our stakeholders.

Market outlook and investment strategy

Macro-economics

The economic outlook for the Fund's main markets is weaker than we have seen in recent years, characterised by low growth, fiscal pressures and an ongoing threat of inflationary pressures re-emerging. This is discussed in more detail in the Investment Adviser's report.

In light of this weakening economic outlook, we will seek to avoid providing highly leveraged loans that are exposed to the more cyclical parts of the infrastructure market. Instead, we remain focused on providing leverage to more defensive assets or, where there is some exposure to the economic cycle, ensuring that leverage is prudent and risks adequately mitigated.

Historically, infrastructure has often outperformed other sectors during periods of economic weakness, and it remains a distinct asset class for investment in an era of global political and economic turbulence.

In short, our investment strategy is to maintain the robust diversified credit quality of our portfolio, while targeting investments yielding in excess of 9% (after taking account of the effect of currency hedging on yields).

Interest rates

The interest rate environment in which the Fund operates has continued to evolve. Short-term rates are falling but the current outlook is "higher for longer". Long-term rates have increased materially, notably in the UK and US, driven by inflation fears, a poor outlook for growth and fiscal pressure. This outlook creates a sweet spot for income-generating strategies in private credit as attractive returns are not dependent on wide yield spreads over borrowing costs.

The Fund has looked to increase the fixed rate proportion of the portfolio either by making fixed-rate loans or by entering into interest rate swaps. Overall, 61.7% of our portfolio is now fixed or hedged into fixed rates. While this is slightly above our target, given a prepayment on the last day of the period, the overexposure was rebalanced in the following month. This strategy should serve the Fund well if rates fall and will help to protect the dividend cover in such a situation.

Exposure to the US infrastructure market

One recent development in the portfolio has been the moderation of our exposure to the US infrastructure market. There are two reasons for this, as explained in more detail in the Investment Adviser's report. Firstly, uncertainty over, and adverse changes to, government policies, such as in the renewable energy sector, has made it harder to find high-quality investments with an acceptable risk profile. This has been compounded by the challenges in assessing the consequences of the current administration's trade and tariff policies, especially with regards to investments in the transport sector. Secondly, the yield premium that we have historically seen in the US, relative to (for example) Europe and the UK, has reduced in recent years. This is possibly a consequence of the increasing proliferation of private credit funds in the US.

Having said that, although our exposure to the US has shrunk by approximately 22% over the past 18 months, it is our largest geography and continues to present attractive opportunities. It remains a large, diversified economy with a significant requirement for capital (both debt and equity) for infrastructure. Our approach has been to target those sectors that are generally less exposed to political uncertainties such as grid infrastructure, digitalisation and utilities. The US remains a core jurisdiction for the Fund.

Dividend

Portfolio interest income remains resilient given our continuing ability to deploy capital at attractive rates in the main markets we operate in. In this half year, our dividend remains fully cash covered by a factor of 1.01x. We expect the dividend cover to increase over the second half of this year. We also intend to use Fund leverage to ensure that we remain 100% invested at all times and minimise cash drag.

Sustainability - Environmental, social and governance ('ESG') considerations

SEQI continues to pursue its comprehensive sustainability agenda through its continued application of negative screening, positive screening for opportunities that fall within one of its three defined sustainability themes, and advancing the sustainability characteristics of the portfolio as measured by its in-house ESG scoring system.

The portfolio's weighted average ESG score increased during the period, rising from 64.70 at the last year-end to now 65.44, reflecting both selective investment activity and the steady progress of our borrowers in enhancing their sustainability performance as well as in their reporting.

During the period, we conducted a stakeholder evaluation of the relative importance of certain areas of sustainability and responsible investment, seeking inputs and feedback from Shareholders, our Investment Adviser and the Board. This evaluation is a key element to a broader initiative covering our Sustainability Framework. This initiative also includes a wholesale review of our ESG scoring framework to reflect evolving market practices, regulatory developments, ensuring continued relevance and rigour whilst also seeking to address some of the limitations of the uniform approach embedded in our current scoring methodology. We look forward to being able to share the results and outcomes of this review in SEQI's forthcoming 2026 Annual Report.

Closing

SEQI remains a compelling investment proposition, offering investors access to a diversified portfolio of essential infrastructure assets delivering attractive, stable income largely underpinned by long-term contractual cash flows. In a period of easing rates and constrained bank lending, the Fund is well positioned to capture high-quality opportunities at favourable risk-adjusted returns. We believe this combination of yield, resilience and disciplined portfolio management places SEQI in an excellent position for the period ahead.

I would like to close by thanking our Shareholders for your continued commitment and support. Thanks also to Andrea Finegan, our Independent Consultant, who has supported SEQI on risk and sustainability matters for many years; and finally to my fellow Board members, the Investment Adviser, Investment Manager, our Brokers and all the other critical service providers who continue to manage the Fund prudently and who have collectively positioned us well to continue delivering attractive returns.

These Interim Financial Statements do not take into account the Autumn 2025 UK budget announcement due to timing. Should any matters relevant to the Fund be subsequently identified, these will be communicated separately in due course.

James Stewart

Chairman

27 November 2025

INVESTMENT ADVISER'S REPORT

The Investment Adviser's objectives for the year

Over the course of the first half of the financial year, Sequoia Investment Management Company Limited ("SIMCo" or the "Investment Adviser") has had the following objectives for the Fund:

Gross portfolio return of 8-9% 

·   9.7% portfolio yield

·   10.1% annualised NAV total return

Manage the portfolio responsibly through a falling interest rate environment

·   38.3% floating rate

·   61.7% fixed rate exposure (net of interest rate swaps)

Manage portfolio credit quality in the face of economic uncertainty

·   57.2% senior secured loans

·   38.1% weighted average equity cushion

Continue to enhance the Fund's sustainability profile

·   65.44 ESG score (64.70 as at 31 March 2025)

Timely and transparent investor reporting

·   12 monthly NAV updates

Dividend target of 6.875p per Ordinary Share per annum

·   3.4375p per Ordinary Share paid during the six-month period

Economic infrastructure is a diverse and highly cash-generative asset class

Economic infrastructure debt has established itself as a resilient and dependable asset class, attracting a broad spectrum of investors. Borrowers in this space typically operate within sectors characterised by substantial barriers to entry, including high capital intensity and rigorous regulatory frameworks, which protect incumbent operators and, by extension, their creditors. These investments generally generate steady, predictable cash flows, reflecting the essential nature of the underlying services. In addition, the tangible assets that underpin economic infrastructure projects provide a layer of security, further enhancing the stability and defensiveness of the asset class.

Economic infrastructure debt continues to attract investors seeking steady income and long-term resilience. Core sectors include transport, utilities, energy, digitalisation, renewables, and select social infrastructure projects with comparable attributes. These businesses frequently operate under long-term concessions or licences, with revenues linked to usage or demand.

To mitigate demand risk, projects in this space are typically structured with lower leverage, stronger equity buffers, conservative credit metrics, robust covenant packages, and significant asset backing, all of which enhance protection for lenders. In an environment marked by market volatility, elevated geopolitical tensions, and persistent inflationary pressures, the Fund has deliberately prioritised operational assets, senior secured debt, and non-cyclical industries.

This disciplined approach, consistent with our broader balance sheet and portfolio strategy, has strengthened resilience, reduced exposure to cyclical stress, and ensured that SEQI remains well-positioned to capitalise on attractive reinvestment opportunities while safeguarding investor returns.

The market environment during the period

Infrastructure debt continues to benefit from the stability of long-term contracted revenues, though valuations remain influenced by broader market forces. Over the past year, government bond markets saw sharp declines followed by recovery, while heightened volatility, driven by persistent inflation, tariff tensions, and geopolitical uncertainty, shaped investor sentiment. Despite these pressures, pan-European high-yield bonds returned approximately 3.6% year-on-year, and yield curves that had been inverted through much of the prior period began to flatten as markets adjusted to shifting inflation dynamics.

Inflation has remained above target across the US, UK, and Eurozone, with upward pressure more pronounced in the US and UK while the Eurozone remains close to target levels. Headline year-on-year rates have risen over the last six months in the US, climbing from 2.4% to 2.9%, and in the UK from 2.8% to 3.8%, with the Eurozone flat at 2.2%. Higher energy prices, alongside wage growth and persistent services inflation, have shaped the timing and scale of monetary policy responses, with the US Federal Reserve, European Central Bank, and the Bank of England each addressing distinct domestic challenges. Markets currently anticipate further cuts in the US (around two additional in 2025), compared with more limited easing expected in the UK, and the Eurozone's expected conclusion to its cutting cycle.

The Fund's private debt portfolio remains sensitive to shifts in interest rates and credit spreads in public markets. Volatility in government bonds, high-yield credit, and leveraged loans has, at times, affected valuations; however, such impacts are generally unrealised mark-to-market adjustments that are reversed as loans approach maturity. While higher long-term interest rates have slowed the reversal of these mark-downs for the fixed-rate portfolio as at the end of the period, these effects have been more than offset by early prepayments received. The implications of higher-for-longer rate expectations are outlined further below in the Market backdrop section.

Private credit markets continue to expand as companies seek alternatives to traditional financing. Direct lending to private equity-backed firms remains particularly active, offering flexibility and yield premiums over syndicated loans. Against this backdrop, the Fund is well positioned to capture opportunities arising from refinancing and restructuring needs as borrowers take advantage of declining debt service costs compared to prior years.

Market backdrop

Interest rates

What is happening?

Over the past year, the US, UK, and Eurozone have moved into a rate-cutting cycle, with central banks easing policy for the first time in four years. While the pace of reductions has varied by region, the shift marks a clear departure from the tightening that dominated the prior period.

Why this matters to SEQI?

The combination of falling short-term rates and a "higher for longer" outlook creates a favourable environment for SEQI's absolute return strategy. Returns are supported by borrowers proven in higher-rate markets, reflecting credit profiles that have adjusted to sustained elevated costs of capital rather than those reliant on legacy low-rate financing. At the same time, higher long-term rates in the UK and US sharpen the focus on portfolio positioning, influencing the balance between fixed and floating exposure, the hedging strategy, and the realisation of pull-to-par gains. This disciplined approach ensures that the portfolio remains resilient while continuing to generate stable income and capture reinvestment opportunities.

Difference between 10-year and 1-year government bond yield (%)

What is happening?

The difference between 10-year and 1-year government bond yields has shifted from negative territory in 2023 to positive territory across all of SEQI's investment jurisdictions by mid-2025. The UK has seen the steepest rise, with spreads now over +1%, while the US and EU are both around +0.5-0.7%. This marks a clear reversal of the prolonged period of yield curve inversion.

Why this matters to SEQI?

A normalising yield curve environment signals a move away from the stresses associated with inverted curves and is typically supportive of improved economic sentiment. For SEQI, this backdrop enhances confidence in the resilience of borrower fundamentals and should encourage greater demand for infrastructure credit.

European infrastructure loan financing

What is happening?

During 2025, utilities, renewables and the other categories have all seen notable increases in loan financing. Renewables remain strong at approximately £63 billion, utilities have more than doubled compared to the same period in 2024, and "other" sectors continue to attract sizeable volumes, underscoring broad investor appetite beyond core areas.

Why this matters to SEQI?

During the period, SEQI's exposure to European jurisdictions increased from 23.5% to 28.0% through the acquisition of nine loans, including investments in the utilities, renewables and other sectors.

NAV and Fund performance

Over the last six months, the Fund's NAV per Ordinary Share increased from 92.55p per Ordinary Share to 93.67p per Ordinary Share ex-dividend, driven by the following effects:

Factor	NAV effect
Interest income on the Fund's investments	4.30p
Portfolio valuation movements, net of foreign exchange and hedging movements	0.86p
IFRS adjustment from mid-price at acquisition to bid price	(0.11)p
Operating costs	(0.66)p
Gains from buying back Ordinary Shares at a discount to NAV	0.17p
Gross increase in NAV	4.56p
Less: Dividends paid	(3.44)p
Net increase in NAV after payment of dividends	1.12p

The Fund delivered a total return on NAV of 5.0% for the six-month period, exceeding its long-term net return objective of 7-8% per annum, and outperforming high yield bonds which returned 3.6% during the same period.

SEQI's share price total return between March 2025 and September 2025 was 3.8%, outperforming 10-year Gilts, which returned 2.2% during the same period. However, the portfolio underperformed relative to equity markets, trailing the FTSE All Share Index, which increased by 11.4% during the same period.

As in previous periods, the principal factor that positively influenced NAV performance was the interest income derived from investments. Valuation movements in the Fund's investments have been positive, with the majority of negative adjustments offset by the progress made on loans under enhanced scrutiny and an uplift in the valuation of the Fund's fixed-rate assets. Further positive "pull-to-par" effects will be recognised over time, as a substantial amount of unrealised valuation decreases that were caused by the rapid increase in term rates over recent years are likely to be reversed.

The Investment Adviser believes the portfolio is well positioned to outperform liquid credit markets over the long term. Private debt typically delivers higher yields than liquid credit of comparable quality, while infrastructure-backed debt offers stronger resilience through asset support, evidenced by the Fund's lower loss rates relative to equivalent liquid credit. In addition, the portfolio's broad diversification across sectors, sub-sectors, and geographies helps mitigate exposure to idiosyncratic risks, reducing overall portfolio volatility through low asset correlation.

Share performance

As at 30 September 2025, SEQI had 1,538,099,673 Ordinary Shares in issue (31 March 2025: 1,555,061,936). The closing share price on that day was 77.90p per Ordinary Share (31 March 2025: 78.30p per Ordinary Share), implying a market capitalisation of approximately £1.20 billion, a decrease of c.£20.0 million compared to six months ago, partially due to the Fund's share buyback programme, which has reduced the number of Ordinary Shares in issue.

After taking account of dividends paid of 3.4375p per Ordinary Share, the annualised share price total return over the period was 7.7%. The 0.4p decrease in the share price over the six-month period was driven by a persistent negative market sentiment toward alternative assets, including debt funds in the listed investment company sector. Capital outflows, driven by investors reallocating to tax-efficient government bonds and currently high-yielding money market instruments, have further pressured share prices. However, the sector experienced greater stability in the first half of this financial year as key market interest rates were cut for the first time in four years.

Both the Investment Adviser and SEQI's Directors believe the current share price discount to NAV is still excessive and does not fully reflect the portfolio's ability to deliver attractive risk-adjusted returns through periods of economic uncertainty, its comparatively shorter investment duration, and the strength of its valuation framework. Against this backdrop, the Fund has maintained its policy of repurchasing Ordinary Shares it considers undervalued, thereby enhancing NAV per Ordinary Share for existing Shareholders. Over the past six months, 16,962,263 Ordinary Shares have been repurchased at an average price of 77.76p. Since the launch of the buyback programme in July 2022, a total of 230,139,325 Ordinary Shares have been repurchased, representing 13.0% of the Ordinary Shares in issue at the outset. This initiative has added 1.93p to NAV per Ordinary Share since inception.

Dividend Cover

In accordance with its target, the Fund has paid 3.4375p in dividends for the last six months. The Fund's dividend cash cover was 1.01x for the first half of the financial year, showing a slight improvement to the previous year's cover of 1.00x.

We believe there is upside potential for the dividend cover for the remaining half of the financial year and the near future given the extensive progress that has been made on the non-cash generating assets of the portfolio. Moreover, the higher proportion of fixed-rate investments, inclusive of interest rate swaps, further protects the Fund's income from larger-than-expected reductions in risk-free rates.

Fund performance
					30 September 2025		31 March 2025		30 September  2024
NAV	per Ordinary Share				93.67p		92.55p		95.03p
	£ million				1,440.8		1,439.2		1,497.8
Cash held (including in the Subsidiaries)			£ million		84.9		35.1		88.7
RCF utilisation	£ million				33.2		56.9		20.0
Invested portfolio1	percentage of NAV				96.6%		100.8%		89.9%
Total portfolio	including investments in settlement				112.5%		109.8%		93.5%
Portfolio characteristics
					30 September 2025		31 March 2025		30 September  2024
Number of investments					53		59		56
Valuation of investments		£ million			1,366.2		1,422.7		1,346.3
ESG score					65.44		64.70		64.65
Largest exposure		£ million percentage of NAV			90.2 6.6%		70.3 4.9%		98.0 6.5%
Single largest investment Average investment size		£ million percentage of NAV £ million			65.0 4.8% 25.3		61.7 4.3% 23.7		61.7 4.1% 21.4
Sectors Sub-sectors Jurisdictions		by number of invested assets			8 28 11		8 29 10		8 29 10
Private debt Senior debt Floating rate Construction risk		percentage of invested assets			94.6% 57.2% 38.3% 11.7%		90.8% 59.9% 40.6% 12.5%		94.4% 58.5% 37.7% 8.1%
Weighted average maturity Weighted average life Yield-to-maturity Modified duration		years years			3.4 3.2 9.7% 2.1		3.6 3.4 9.9% 1.9		3.8 3.5 9.9% 2.0

1 Relates to the portfolio of investments held in the Subsidiaries

As shown in the table above, the Fund's NAV increased marginally by £1.6 million during the period. Without SEQI's ongoing share buyback programme, which amounted to £13.2 million during the period, the NAV would have increased by approximately £14.8 million.

The reduction in the weighted average maturity and life of the portfolio enhances reinvestment flexibility and enables the Fund to capture attractive spreads as opportunities arise, strengthening its positioning in the current market environment. The Investment Adviser has also increased the allocation to fixed-rate investments, which now represent nearly 62% of the portfolio (net of interest rate swaps), in order to capitalise on elevated term rates. The Fund's target remains unchanged at 60%, with the prepayment of a large floating-rate loan on the final day of the period resulting in a slightly elevated ratio. The temporary overexposure was addressed shortly after the period end. In addition, the Fund has entered into longer-dated interest rate swaps to compensate for the reducing weighted-average maturity of the portfolio. This positioning allows the Fund to lock-in higher levels of income in a declining rate environment compared with an unhedged mix of fixed and floating-rate assets.

Credit performance

Over the past six months, the credit performance of the entire portfolio has remained strong. However, given that the portfolio comprises high-yield debt instruments, it is to be expected that a small proportion of investments will face some credit issues over their lifetime. The Fund's annual loss rate is 0.54%, a marginal increase from the previous year's 0.51%, due to additional write-downs of non-performing loans. This compares well to broader credit (non‑financial corporate debt) with a similar credit rating, where the historical annual loss rates are typically a multiple of this level.

Updates on the Fund's two non-performing loans can be found below.

Non-performing loan

SEQI continues with legal proceedings on an asset equal to 0.5% of the portfolio which is being classed as non-performing. The loan is backed by a recently revalued asset and is marked in line with a conservative estimate of a recovery backed by that asset. The Fund is unable to disclose the loan's identity for commercial reasons.

US private school

A mortgage-secured loan, collateralised by a landmark educational property in the US, has been adversely affected by recent US government budget cuts, which have reduced the likelihood of securing new tenants. In March 2025, the Department of Government Efficiency ("DOGE"), announced plans to reduce the US Department of Education's workforce by approximately 50%, a reduction of around 2,200 employees, and to curtail significantly federal funding for education in Washington, D.C. (which, as a federal district, is not state-funded). These developments have had a material negative impact on leasing discussions with prospective tenants, most of whom are educational institutions, leading to the cancellation of a previously anticipated lease. Consequently, the loan's mark has been reduced, reflecting increased uncertainty and a longer expected lease-up period. The carrying value of the loan currently represents approximately 0.1% of the portfolio.

Higher scrutiny loan

The portfolio's largest single-name exposure, Active Care Group ("ACG"), remains under enhanced scrutiny. Since SEQI assumed ownership following the restructuring of our original loan to the company, ACG has delivered tangible operational and financial progress against its turnaround strategy. This is partially evidenced by Care Quality Commission inspection ratings over the past 12 months, with 96% of services rated 'good' or 'outstanding', marking a significant improvement from less than 75% at the time of the restructuring. The company has also made a return to operational profitability. As part of the turnaround, ACG is executing a multi-year asset optimisation programme intended to strengthen its balance sheet and better align its portfolio with long-term growth opportunities, including in private neuro-rehabilitation facilities. In our view, successful delivery of this asset optimisation programme should enhance enterprise value and support recovery prospects on the loan with potential upside to our investment. The carrying value of this exposure currently represents approximately 6.6% of the portfolio.

Balance sheet management

At the beginning of the period, the Fund held a cash balance of £35.1 million (including £27.3 million held in the Subsidiaries) alongside £56.9 million drawn on its revolving credit facility. Over the subsequent six months, the Fund utilised its balance sheet flexibly, increasing the facility's utilisation up to £114.5 million at its peak in July 2025 before repaying the facility towards the end of the period. This ensured that repayments from investments did not create cash drag, as the Fund was able to redeploy capital efficiently during the interval between repayments and new commitments.

By the end of the period, the Fund held a cash balance of £84.9 million (including £79.3 million held in the Subsidiaries) and had reduced its utilisation of the revolving credit facility to £33.2 million, supported by significant prepayments from Project Nimble and Tracy Hills, the latter at September month-end. These inflows resulted in the Fund modestly de-leveraging ahead of the half-year end, while maintaining sufficient liquidity to continue supporting its investment pipeline.

The ongoing repayment and reinvestment cycle remains a key driver of the Fund's balance sheet strength. Repayments provide upfront fee income and, when actively managed, create opportunities to reinvest into attractive sectors where the Fund sees strong relative value. This cycle supports the agility of the Fund, allowing it to rebalance exposures, target favourable risk-adjusted returns, and preserve capital efficiency, provided liquidity is actively managed to avoid undue drag.

Overall, the Fund's approach to balance sheet management during the period demonstrated a disciplined use of leverage, proactive recycling of capital, and a focus on ensuring that repayments are translated into reinvestment opportunities rather than idle cash balances. This strategy reinforces the Fund's ability to generate income while maintaining balance sheet resilience.

The Investment Adviser also considers multiple scenarios of projected repayment profiles as a basis for SEQI's dynamic RCF utilisation target.

Portfolio valuation

Currently, the average loan in the portfolio rated single-B or higher is valued at approximately 98 pence in the pound. This discount primarily reflects the impact of higher rates, relative to the market conditions prevailing at origination. Over time, and absent any credit losses, as these loans approach maturity, their value will accrete towards par value, a dynamic commonly referred to as the "pull-to-par" effect.

These NAV estimates are calculated on the assumption that interest rates and bond yields remain constant and they do not factor in NAV-accretive mechanisms beyond the pull-to-par effect; the only variable considered being the passage of time. Non-performing loans are excluded from the calculation, while recoveries on underperforming loans are based on internal credit ratings. The pull-to-par effect is expected to have a material positive impact on NAV over the next three years.

Period	Pull-to-par (£ million)	Pull-to-par (pence per Ordinary Share)
1 October 2025 to 30 September 2026	29.4	1.91
1 October 2026 to 30 September 2027	13.8	0.90
1 October 2027 to 30 September 2028	4.2	0.27
1 October 2028 and after	3.9	0.26

Portfolio update

SEQI's exposure to the US has moderated from 45.8% to 41.1% over the period, reflecting disciplined allocation amid heightened policy uncertainty, shifting regulatory priorities, and the risk of tariffs affecting cross-border trade and investment flows. The Fund has deliberately pursued greater regional diversification, with a growing pipeline of opportunities in Europe and the UK.

As noted in the Chair's statement, our capital deployment has been shaped by conditions in the US that have made investment in the jurisdiction slightly less compelling than in previous years. For example, tariff policy has turned into a moving target, with renewables being the most affected sector. What started in May 2024 with an increase in duties on EVs, batteries and solar inputs, has evolved into aggressive anti-dumping and countervailing tariffs on solar cells and modules from Southeast Asia. Unsurprisingly, this has introduced cost volatility into supply chains and project budgets. At the same time, the power grid's bottlenecks remain material despite the Federal Energy Regulatory Commission's Order 2023. The policy promised to speed up connecting new power resources to the grid, and yet timelines on new projects continue to be delayed in key regions. Against this backdrop, investment appetite has almost entirely become a function of volatile wholesale market signals as seen by the 22% increase in capacity prices within the largest US power grid operator in July 2025, leading to a reawakening of originations.

Simultaneously, the historical yield pick-up available in US private credit has declined as competition has intensified. Large managers have accumulated dry powder, enabling mid-to-upper market borrowers to arbitrage lenders, tightening the available spreads and softening terms relative to Europe and the UK.

Taken together, these factors reduce the risk-adjusted appeal of new US exposure at this stage in the cycle and motivated our tilt towards jurisdictions where policy and pricing are currently more predictable.

That said, the US remains our single largest market and continues to present attractive opportunities. It has a large, diversified economy with a significant requirement for capital (both debt and equity) for infrastructure and remains a core jurisdiction for the Fund. This is also reflected in the pipeline of investment opportunities, particularly in grid infrastructure, digitalisation and utilities, in keeping with our approach to target those parts of the US infrastructure market that are least exposed or are considered to have less exposure to political uncertainties, or which benefit from strong tailwinds that provide enough momentum to absorb some policy uncertainty.

Examples would include the digitalisation and power sectors (which are becoming increasingly linked, given the energy requirements of AI data centres). By sourcing high quality private-sector infrastructure assets, with a predominantly domestic consumption, the Fund has been able to keep meeting its target returns, while maintaining an appropriate risk profile.

Recently, a few high-profile corporate defaults in the US have led to higher scrutiny of the private credit markets. In a tightening credit spread environment, it is sensible for investors to question the underwriting discipline and leverage levels in certain private-credit segments. We would, however, emphasise that our investment processes remain disciplined and that the infrastructure sector continues to benefit from stable, contractual cashflows and a low correlation to broader corporate credit.

Origination activities            

The Fund's investment strategy spans both primary and secondary debt markets, each offering distinct advantages. In the primary market, the Fund benefits from upfront lending fees, the ability to structure investments to specific requirements, and the additional return available through the illiquidity premium. In the secondary market, acquisitions facilitate the rapid deployment of capital into seasoned assets with established performance histories, supporting efficient portfolio management.

Primary Market Origination

The Fund remains principally focused on the primary loan market, which continues to offer attractive returns. The Investment Adviser targets bilateral transactions, participates in selective "club" deals with small groups of lenders, and also invests in broadly syndicated infrastructure loans. Primary market lending is particularly attractive given its favourable economics, including upfront fees and greater scope to negotiate bespoke terms. As the Fund has grown, its activity in the primary market has expanded accordingly and now accounts for the majority of the portfolio (89.0%).

Secondary Market Origination

Although the primary market is a key focus, the Fund also acquires assets from banks or other lenders in the secondary market. This approach enables faster capital allocation, as primary infrastructure debt transactions can take time to finalise. Additionally, secondary market assets tend to offer greater liquidity, providing the Fund with flexibility when liquidity needs arise. Infrastructure loans often experience improved credit quality over time, meaning many secondary loans offer enhanced credit strength compared to their original issuance.

Strong pipeline of opportunities

The pipeline of investment opportunities remains strong, supported by a sustained and growing global demand for infrastructure credit. According to Preqin, global fundraising for infrastructure debt remains resilient. By March 2025, global infrastructure private funds' assets under management ("AUM") grew to a combined total of USD 1.6 trillion.

A Compelling Market Opportunity

▪ Thematic alignment: decarbonisation, digitalisation, demographics, deglobalisation

▪ Under-invested: bank lending constrained

▪ Optimal timing: high term rates with slow expected easing

▪ Equity-like returns: private mid-market premium spreads with credit protections

▪ Diversifier: asset-backed cashflows and low correlation to broader private credit

For SEQI, this strong demand environment should translate into a robust pipeline of opportunities, ensuring continued access to high-quality investments across geographies and sectors. The team remains well positioned to selectively deploy capital into transactions that meet the Fund's strict risk-return criteria.

The Investment Adviser has continued its active management of the Fund's portfolio through its enhanced monitoring practices. However, we are pleased to report that a number of investments which required more time-intensive management have come to a successful completion. This has enabled an increased focus on origination activities, resulting in a substantial pipeline of approximately £350 million in potential investments. Whilst not every opportunity within this pipeline will convert into an investment, the range and volume of prospects sourced by the Investment Adviser demonstrate the abundance of opportunities available in the market.

Potential investments span seven sectors and eight sub-sectors, offering a diverse array of options for the portfolio. Importantly, current preliminary analysis indicates that the average expected yield of these opportunities stands at 9%, at the higher end of the Fund's gross target return range of 8-9%. The diversity and potential returns of the pipeline position the Fund well for future growth, reinforcing confidence in SEQI's ongoing strategy.

Team

During the reporting period, the Investment Adviser has experienced limited employee attrition. To promote the retention of expertise and institutional knowledge, a long-term incentive plan remains in place.

Sequoia Investment Management Company Limited

Investment Adviser

27 November 2025

UNAUDITED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the period from 1 April 2025 to 30 September 2025

		Period ended 30 September 2025 (unaudited)	Period ended 30 September 2024 (unaudited)
		£	£
Income
Net losses on non-derivative financial assets at fair value through profit or loss		(9,748,117)	(67,483,092)
Net gains on derivative financial assets at fair value through profit or loss		7,655,980	50,330,671
Investment income		80,993,486	94,858,567
Net foreign exchange (losses)/gains		(266,825)	257,226
Total income		78,634,524	77,963,372
Expenses
Investment Adviser's fees		4,901,958	4,918,696
Investment Manager's fees		219,247	207,695
Directors' fees and expenses		196,385	163,293
Administration fees		293,873	246,263
Custodian fees		111,412	110,992
Auditor's fees		110,819	120,362
Legal and professional fees		296,156	1,223,394
Valuation fees		372,100	373,800
Listing, regulatory and statutory fees		80,270	85,283
Other expenses		417,814	334,326
Total operating expenses		7,000,034	7,784,104
Loan finance costs		3,717,659	2,020,391
Total expenses		10,717,693	9,804,495
Profit and total comprehensive income for the period		67,916,831	68,158,877
Basic and diluted earnings per Ordinary Share		4.40p	4.26p

All items in the above statement derive from continuing operations.

UNAUDITED CONDENSED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the period from 1 April 2025 to 30 September 2025

Unaudited		Share capital	Retained losses	Total
		£	£	£
At 1 April 2025		1,664,593,419	(225,404,819)	1,439,188,600
Total comprehensive income for the period		-	67,916,831	67,916,831
Share buybacks		(13,203,100)	-	(13,203,100)
Dividends paid during the period		-	(53,139,727)	(53,139,727)
At 30 September 2025		1,651,390,319	(210,627,715)	1,440,762,604

For the period from 1 April 2024 to 30 September 2024

Unaudited		Share capital	Retained losses	Total
		£	£	£
At 1 April 2024		1,720,452,093	(196,169,547)	1,524,282,546
Total comprehensive income for the period		-	68,158,877	68,158,877
Share buybacks		(39,489,172)	-	(39,489,172)
Dividends paid during the period		-	(55,098,669)	(55,098,669)
At 30 September 2024		1,680,962,921	(183,109,339)	1,497,853,582

UNAUDITED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

At 30 September 2025

		30 September 2025	31 March 2025
		(unaudited)	(audited)
		£	£
Non-current assets
Non-derivative financial assets at fair value through profit or loss		1,472,850,973	1,479,215,419
Current assets
Cash and cash equivalents		5,606,333	7,523,136
Trade and other receivables		2,113,486	2,411,179
Derivative financial assets at fair value through profit or loss		14,385,350	17,669,291
Total current assets		22,105,169	27,603,606
Total assets		1,494,956,142	1,506,819,025
Current liabilities
Trade and other payables		3,529,661	3,596,055
Derivative financial liabilities at fair value through profit or loss		17,454,233	7,181,087
Total current liabilities		20,983,894	10,777,142
Non-current liabilities
Loan payable		33,209,644	56,853,283
Total liabilities		54,193,538	67,630,425
Net assets		1,440,762,604	1,439,188,600
Equity
Share capital		1,651,390,319	1,664,593,419
Retained losses		(210,627,715)	(225,404,819)
Total equity		1,440,762,604	1,439,188,600
Number of Ordinary Shares		1,538,099,673	1,555,061,936
Net Asset Value per Ordinary Share		93.67p	92.55p

The Unaudited Condensed Interim Financial Statements were approved and authorised for issue by the Board of Directors on 27 November 2025 and signed on its behalf by:

Margaret Stephens

Director

UNAUDITED CONDENSED INTERIM STATEMENT OF CASH FLOWS

For the period from 1 April 2025 to 30 September 2025

	Note	Period ended 30 September 2025 (unaudited)	Period ended 30 September 2024 (unaudited)
		£	£
Cash flows from operating activities
Profit for the period		67,916,831	68,158,877
Adjustments for:
Net losses on non-derivative financial assets at fair value through profit or loss		9,748,117	67,483,092
Net gains on derivative financial assets at fair value through profit or loss		(7,655,980)	(50,330,671)
Investment income		(80,993,486)	(94,858,567)
Net foreign exchange losses/(gains)		266,825	(257,226)
Loan finance costs		3,717,659	2,020,391
Increase in trade and other receivables (excluding prepaid finance costs and investment income)		(203,677)	(31,397)
Decrease in trade and other payables (excluding accrued finance costs, investment income and share buybacks)		(50,909)	(172,166)
		(7,254,620)	(7,987,667)
Cash received on settled forward contracts		22,552,172	18,591,478
Cash paid on settled forward contracts		(829,404)	(23,139)
Cash received on disposal of interest rate swaps		-	5,323,394
Interest rate swap interest paid		(509,701)	(336,338)
Cash investment income received		48,041,384	50,989,194
Purchases of investments		(251,427,683)	(171,987,458)
Sales of investments		280,996,114	190,903,350
Net cash inflow from operating activities		91,568,262	85,472,814
Cash flows from financing activities
Proceeds from loan drawdowns		129,694,283	35,277,121
Loan repayments		(153,540,476)	(15,495,491)
Payments of loan finance costs		(3,396,757)	(3,311,373)
Share buybacks		(13,050,412)	(40,369,048)
Dividends paid		(53,139,727)	(55,098,669)
Net cash outflow from financing activities		(93,433,089)	(78,997,460)
Net (decrease)/increase in cash and cash equivalents		(1,864,827)	6,475,354
Cash and cash equivalents at beginning of period		7,523,136	7,507,495
Effect of foreign exchange rate changes on cash and cash equivalents during the period		(51,976)	(56,916)
Cash and cash equivalents at end of period		5,606,333	13,925,933

 

END