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Questor share tip: 3i Infrastructure is a solid yield play

This is an investment fund that invests in long-term infrastructure projects around the world to generate yield. However, the company has investments in India too – which there is potential for capital appreciation over time.

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3i Infrastructure
116.7p
Questor says BUY

This is an investment fund that invests in long-term infrastructure projects around the world to generate yield. However, the company has investments in India too – which there is potential for capital appreciation over time.

The company recently said that portfolio income in the last three months of 2010 was £23.8m.

On November 4 last year the group bought Eversholt Rail Group in consortium with Morgan Stanley Infrastructure Partners and STAR Capital Partners.

Eversholt owns approximately 29pc of the total current British train fleet, which it leases to train-operating companies. Full details of its portfolio can be found on www.3i-infrastructure.com.

The fund has a significant stake in the 3i India Infrastructure Fund, a $1.2bn (£760m) investment fund focusing on the port, airport, road and power sectors.

The shares were first recommended on December 14 2010 and they are now 4pc below that level. There are few forecasts for dividends this year, but last year's full-year payment was 5.3p, giving an historical yield of 4.6pc, which is very attractive given current bank rates. Buy for the income.

Note: Questor is recommending shares in the fund which trades under the symbol 3IN, not the warrants, which are trading at 16p under the symbol 3WINW. Also, investors must note that for tax purposes the source for dividends from this fund is the Channel Islands.