Ecofin Global Utilities and Infrastructure Trust (LSE:EGL) — Investor Presentation

0:01 Good morning, and welcome to the ECOFIN GLOBAL UTILITIES AND INFRASTRUCTURE TRUST PLC investor presentation. Throughout this quarter presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time by the q and a tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives in the meeting itself. Have the company can view all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to portfolio manager, Jean Luc

0:32 de la Maize. Good morning to you, sir. Good morning. Thank you, Alessandro. Good morning all. Jean Luc de la Maize, yes, portfolio manager for ECOFIN GLOBAL UTILITIES AND INFRASTRUCTURE TRUST, which we're going to talk about this morning. A quick word on on ECOFIN. The firm was actually founded over thirty years ago as a specialist of utilities and infrastructure. We joined the Red Wheel platform in October 2024. So therefore, a few months ago, with the whole of the investment team, which you have the photos on in front of you, an experienced investment team of seven team members, all specialists of the space of the economic infrastructure and utilities, and we very much focused on the listed part of the investment universe.

1:37 Quick word summary about EGL and its strategy. So first of all, for those of you who are the least familiar with the investment universe, why listed infrastructure? Well, this is a universe which is based on long term business models, long term contracts, which provides high degrees of predictability of future cash flows, are exposed to secular growth trends, offer ways also to offset the effects of inflation. So overall, long duration investment strategy are pretty immune from short term economic cycles. So this is pretty much the main characteristic of infrastructure and listed infrastructure in particular.

2:24 So why EGL? Our objective with EGL is very much to provide long term capital growth while also offering an attractive dividend income for shareholders with notably some capital preservation characteristics to the mix. Our objective is to deliver a total return of six to 12% per annum over the long term. This is very much what we have delivered since inception in 2016. What I would say, as I mentioned, is that we are a team of specialists at ECOFIN. We only focus on that investment universe. The closed end structure is of interest to us. It corresponds to the long duration characteristic of the the contracts and business models we invest in. It also provides us with the flexibility of some gearing to enhance shareholder returns, which has very much been what gearing has delivered over the years since 2016 for EGL.

3:29 Track record, 10 and a half percent per annum for the NAV progression over the past nine years, 12.2% per annum for the share price, which is obviously of interest to you, the shareholders. So this is what EGL has delivered. Why do we feel there is a specific opportunity to invest in the space of listed infrastructure and in EGL today? What I would highlight are some of the big picture characteristics, notably having to do with the electrification, increase in electricity demand worldwide. There's definitely a booster to the growth profile of a lot of companies we invest in in the space, in part driven by the development of data centers as most of you will have heard of by now, although it's a pretty recent trend.

4:27 There's also an opportunity in the transformation of the business models of utility companies over the years. I will explain that in a few minutes. And overall, infrastructure CapEx requirements that we see in most OECD economies are definitely tailwinds for earnings growth of the space. The last point I would highlight is a significant valuation gap between where listed infrastructure currently trade pretty much on historic lows and where private equity specialist investors are typically valuing similar models. So we see a valuation gap which we believe is an anomaly and which we expect to reduce over time. And maybe the last point is to mention that EGL, at the moment, trades at a small... Relatively small discount to NAV, but this obviously adds to the potential opportunity for investor that's... At this stage.

5:26 So this is for the broad view on the strategy. You know, looking into a bit more details about the profile of of EGL. Our investment strategy, as you can see here on this slide, is is global. We aim at maintaining some balance between North America and UKEurope. That's a way to diversify your risk and to gain exposure, we believe, to all the key themes behind the structural growth aspects of infrastructure as I just mentioned. We've decided to cap exposure to emerging markets at 10%, mostly for risk purposes.

6:13 And then income and growth. As you see at the top of this slide, income typically for EGL represents a portfolio dividend yield of around 4%, typical dividend yield for us in the portfolio. But interestingly, we also want growth. And when we mention growth, as I mentioned upfront, we try to have a portfolio which is as much as possible immune from short term cyclical effects, and we very much target exposure to structural growth in the space delivered notably on the back of the energy transition phenomenon. So we expect dividends in our portfolio to grow at an average of 5% to 7% per annum over the medium term.

7:04 If you add those two on top of one another, a dividend yield of around four with dividends growing at around 6% per annum, I would say, you get to double digit total return. And, again, that goes back to our objective that I stated earlier of six to 12% total return per annum. But also it matches what EGL has delivered for its shareholders over the past nine years since its inception in 2016. Investment universe, around 400 companies worldwide, we've identified as part of this utilities and infrastructure and listed universe. Over $4,000,000,000,000 market cap, so it's a very large and scalable universe and strategy.

7:52 And we've defined the space through three subsegments. Electric and gas utilities, that's the most traditional, the one you may be the most familiar with. It's the whole value chain from generation to supply, and it includes, obviously, a kind of a growing proportion of renewable energy, which is one one segment of that. Then environmental services, I'm referring here to water and waste management projects, regulated or nonregulated depending on geographies. And finally, transportation infrastructure. Here, we are talking about toll roads, airport management companies. So this is how we define the space.

8:38 As you will notice, we're talking here about services, asset backed services. We do not invest in industrial or capital goods equipment manufacturers. We very much focus on the asset backed services of the global infrastructure universe. So you have the pie chart at the bottom right again of the geographical exposure of the trust as it stands today. So that's roughly a a snapshot. Now moving on to the the track record. The last fiscal year that closed at the end of September twenty twenty four delivered a 25.9% increase in NAV. It was a good year, strong year, 24.8% for the share price of EGL.

9:32 And since admission in 2016, EGL has delivered, as at the end of September twenty four, 10.2% total return in NAV per annum and 11.8% total return per annum for the share price. This table on that slide six gives you further granularity, and it's an updated performance track record as at the end of June twenty twenty five. As you can see over the past twelve months, 23% increased total return for the NAV and 24.9% for the share price. And what I would highlight is that whatever the time period, one year, three years, five years, or since admission, performance has been reasonably steady and has well outpaced the performance of the SMP global infrastructure index, which you can consider as a reference index.

10:39 Although we don't treat it as a proper benchmark, but definitely it's an interesting indication. And it shows how a proactive stock selection approach to this universe is valid as opposed to a a a purely passive investment strategy for listing infrastructure. So stock picking does pay. And as you can see, it has delivered over the years since admission as at the end of June twenty twenty five. As you can see, the NAV total return per annum has been 10.5%, 10.5% per annum, and 12.2% for the share price, well above the performance of the global infrastructure index of six and a half percent only per annum, and also well above the performance of the FTSE oil share index, which I know for some of you and a lot of you is the the relevant comparison index.

11:38 So that's for the track record. Then we'll move a bit further into the the portfolio and the investment case. Characteristics of the companies in our portfolio, I've I've already briefly referred to it. Essential assets, asset backed services based on long term contracts. This is critical and common to all the subsegments and the companies in our portfolio. Those long term contracts provide inflation indexation factors, but even more importantly, provide high degrees of predictability of the future cash flows, and this is critical for us. And this is how we are able to give you pretty clear indications about the scope for dividend yield and dividend growth that we want to provide to our shareholders with this strategy.

12:32 So that's a common characteristic that you will find for all the holdings in our portfolio. Now the investment case, really, why why now? In the next few slides, we'll describe that. First critical aspect of the strategy and of our focus is the derisking of business models that we are seeing in utilities and infrastructure worldwide. It's an important factor because not only is it really a specific angle of of ECOFIN, we do pay a lot of attention to that. We believe this is the source of alpha generation. So I... This is where we identified a lot of the winners in the portfolio over the years and still today.

13:21 And it's important as well because we believe this is a largely overlooked phenomenon. Look at the the chart at the top and the bar chart at the top of this slide eight. Fifteen years ago, let's say 2008, a bit more than fifteen years ago, you you had 42% of the operating profits of a typical European utility, so close to 50% of the operating profit, stemming from conventional power generation. So fossil fuel intensive, typically a business driven by commodity prices, external factors. Commodity prices, very volatile. A great business when commodity prices were were going up, not as good when they were flat or going down.

14:09 The proportion of 42% has now shrunk for that same sample of the large European utilities. It has shrunk to about 10% today. And what has replaced that, that type of very volatile business model, it's a combination of regulated networks and exposure to fully contracted businesses that you typically find in wind and solar, so in renewable energy. So when I look today at the components of the cash flows of the large utilities in Europe, about 80% stems from predictable activities, either because they are regulated or because they are fully contracted with contracts which are typically of fifteen to twenty years and which give you very clear terms in terms of pricing that you're gonna get over the duration of your contract with some obviously key indexation factors.

15:13 So this is what we mean by derisking of the business model and which we believe this is a source of of growth, enhanced returns, and typically is far from being discounted by by the markets.

15:27 This is very much the effect of the energy transition. We've seen it as a very fast transformation notably in The UK. Worth highlighting here that The UK used to produce half of its electricity fifteen years ago out of coal. Coal fired generation of electricity now is zero in The UK. So in in about fifteen years, The UK has entirely phased out of coal. Again, this is a a very good illustration of that de risking of the model and much more immune from external commodity price fluctuations. And it's a phenomenon which has developed in The UK and Continental Europe, and it's still very much at an early stage in The US as you see in the pie charts at the bottom of this slide.

16:23 So first aspect, derisking of business models. The second one is accelerating growth. And here you have a chart at the top of this slide, notably about demand for electricity in The US. We are just coming out of the phase of roughly twenty five years since 2000 of flat demand for electricity in OECD economies. Marginally up in The US, somewhat down in The UK or Continental Europe, roughly flat over the past twenty five years. Expectations are that demand for electricity is going to increase significantly in the next couple of decades.

17:14 As you can see on this chart, expectations are that demand for electricity in The US will increase close to 40% by 2040. This is on the back of electrification of our world, you know, lighting, air conditioning, kitchen appliances. We are in an electrification phase of our economies. Electric vehicles are also a driver, maybe not a stronger driver as expected a few years ago, but it does matter. And the last factor, as I mentioned earlier, is demand from data centers. As you can see at the bottom left of this slide, this is accelerating starting from a very negligible portion in 2023 and becoming actually very significant for the next few years. Data centers are believed to account for about a a third of the increase in power demand in The US that I just indicated.

18:18 And look at what happens to the companies well exposed to that phenomenon. We've listed two US utilities at the bottom right of this slide, Constellation Vistra, which have in common to own nuclear power generation facilities. And nuclear is is critical because it is today the only technology that provides baseload electricity, so twenty four seven, with no carbon emissions. So it has a strategic positioning, and it's been dramatically rerated over the past year or two, because of that to provide stable and carbon free electricity that not every data centers are are going for. So as you can see on this chart, over the past eighteen months, stocks like Constellation or Vistra have dramatically rerated due to their positioning on this accelerating growth trend for electricity demand.

19:18 Definitely a big driver of our space. And the the third factor that I would mention resulting from the the first two is the factor of enhanced returns. And this is somewhat counterintuitive. Counterintuitive because if you look at the past three years in particular, period during which interest rates have been going up, you know, US ten year treasury yields have moved in a short period of time from 1% to close to 5%, dramatic hike in interest rates, which is typically perceived as a headwind for long duration business models like infrastructure. And this been, I think, for generalist investors, the general perception that a lot of business models, notably in renewable energy, would be unable to pass through the effects of inflation of their costs to their final consumers and customers.

20:21 If you look at those charts, which are industry data provided by level ten energy, so independent industry data, you see The US on the left hand side, Europe on the right hand side, you see that actually prices at which wind and solar operators have been able to sell their electricity has increased dramatically over the past three years. So this shows that those operators have been much more able to pass through the effects of inflation of their costs to their final customers, much more so than what is typically perceived. So this is an interesting phenomenon which bodes well for the returns of those companies going forward because, obviously, they do sign contracts for the next fifteen to twenty years on those types of pricing levels, which are extremely attractive on a historical basis.

21:12 To give you an illustration in in Continental Europe, the average price of electricity over the past twenty years has been around €30 per megawatt hour, and you see we're now at about, you know, more than twice that level currently. Enhance returns, and you see that in the earnings profile of the companies in our universe, which we believe is clearly accelerating. Quarter after quarter, companies we invest in deliver very strong very strong earnings base. And you can see on the top left of this slide how earnings expectations have improved over the past twelve months for both European and US utilities.

22:03 You know, clearly, earnings revisions are up.

22:07 And, again, an asset class which overall has underperformed, so it's quite interesting. And as you can see on the right, there is clearly, and we we agree with that scenario, expectations of an acceleration in the annual growth rates of EPS in our investment universe for the years to come. This bodes well for the performance, which is ahead of us. We've indicated at the bottom of the slide EPS growth expectations for the next two years for higher typically the three subsegments that we invest in, electric and gas utilities, 5% per annum, environmental services, 8%, and transportation infrastructure, about 12% per annum, which is the basis for our confidence in delivering long term dividend growth of five to seven percent per annum for our shareholders, as I mentioned, Enhanced returns, that's clearly part of the investment case and opportunity that we see.

23:15 Then I'll I'll finish with valuation, and I briefly alluded to that. We invest in a space which has been beaten up and derated somewhat by generalist investors over the past three to four years in particular, notably because as we know, listed investors are highly sensitive to interest rates and typically have kind of overlooked long term business models in a phase of rising interest rates and inflation. That leads to a situation where utilities and infrastructure overall trade very much close to their historic lows.

24:02 We've put the relative p multiples for US and European utilities at the top left of this slide with the recent bounce in the past couple of months, interesting bounce, still trading below historical average. And as you can see for global infrastructure as a whole, utilities and transportation and environmental services, we're very much still trading. We're still trading on historic lows in terms of relative peace. That means that the space remains cheap in absolute and and relative basis compared to its historical valuation terms. But one thing I would highlight, and you see that at the bottom right of this slide 12, is that EGL's portfolio is even cheaper than its investment universe.

24:58 Average EV a bill... EV EBITDA multiple of our portfolio is around 10 times. In space of global infrastructure, typically trading on about 18 times, and p of 15 times for our portfolio versus around 19 for global infrastructure. So our portfolio is even cheaper than the typical valuation terms of a global infrastructure, what we see on the listed equities markets. And, obviously, this has an explanation. As as I mentioned upfront, we are looking for those companies which are transforming themselves, are derisking themselves, and are actually gaining exposure to the fastest and fastest growth areas of the investment universe.

25:46 This is where we see the best opportunities, and, typically, those stocks trade at a discounted p. So a cheaper portfolio than even the investment universe itself with a dividend yield of around 4%, which is obviously well above the typical dividend yield you find on general equity markets. And so beaten up valuations, kind of. And I believe it's interesting to see what's happening on the private equity markets because the sense that we have is that private equity infrastructure specialists tend to attribute more sensible values to long duration business models than typically listed equity investors, which are more influenced by fluctuations in interest rates.

26:36 So look at the typical valuations applied by by the the large infrastructure specialists, you know, from a premium which was typically reflecting controlled premium and historical transactions, which was typically 20, 25%. The latest deals that we've seen are more typically based on about 50% premium to listed valuations. Look at Energex, which is the last transaction we saw in February 2025, a 10,000,000,000 Canadian dollar transaction, so quite a sizable transaction in Canada, a takeout by Quebec, add a 58% premium to the last share price close, an 80% premium to thirty day average share price.

27:23 Massive massive premium. That's what we are seeing in a lot of private equity transactions in the infrastructure space. Look at the example of listed airports, you know, one of the segments we invested at the bottom right of this slide. While listed airports trade on about nine and a half times EV EBITDA, the average of the last 10 transactions in private equity markets for airports in OECD economies has been about 19 and a half times EV EBITDA. So pretty much twice the multiple. Massive valuation gap as I highlighted. And it's interesting at a time when we are seeing private equity infrastructure specialists very active, and notably because they've raised record amounts of cash in the past twelve to eighteen months.

28:14 When you take the the top five, the the the world leaders in infrastructure, private equity infrastructure markets, you take Brookfield, Macquarie, BlackRock, Blackstone, KKR to to select those those five. They've raised, you know, much more than a $100,000,000,000 close to a $150,000,000,000 in the past eighteen months only, and they need to invest the monies. So we do expect enhanced activity from private equity specialists, and we believe the discount of listed infrastructure assets compared to where private equity transactions are taking place is an anomaly and is bound to reduce over time. Where's our portfolio?

29:03 You have the top 10 here accounting for more than 40% of the total portfolio of EGL, so it's significant. You will see in those top 10, first of all, hopefully, a lot of names you would be familiar with, large caps. So it's a very liquid portfolio, typically. Diversification of geographies, as I mentioned upfront, diversification of types of business models, regulated, nonregulated, utilities, a lot of transportation, actually, a lot of power grid in our utilities portfolio today, but also water and environmental services with names like Veolia, also transportation infrastructure, airports with name like Vinci or in Italy.

29:56 So that's what we believe is the winning formula, diversification of risk, exposure to the fastest growth areas of the space, and trying to be as much as possible immune from external factors, notably price of electricity, which we believe by definition is is volatile. But we... When you invest in regulated networks, power networks, you are immune... Pretty much immune from that, and you still benefit from volume trends. So this is how our top 10 holdings look like, and, obviously, I'll be open to answer questions on that if if any. In terms of geographical and sector exposure, what I would highlight is that while we aim at maintaining a good balance between North America and and Pan Europe, as I mentioned, We don't prevent ourselves from being opportunistic, and we have been opportunistic over the past eight months.

30:46 Notably, as 2024 was a year very much driven by the strong performance of a lot of our US holdings. And with the change of administration in The US, we were seeing higher risk in The US. We've tended to actually reposition, reallocate a lot of our assets from The US to Europe. As you can see, our exposure to North America moved from 44% in September 24 to 35% today. And in Europe ex UK, we've seen the opposite, 35% of our portfolio in September last year and now above 45% of our portfolio, a dramatic repositioning, which has been helpful.

31:35 As as I mentioned, '24 was largely driven by a lot of our US holdings. 2025 so far this year, very much driven by European names. And sector exposure... Subsector exposure, you have the breakdown to the right. No big significant changes over the months. Last characteristics of the portfolio, as you can see, large caps. 75% of our portfolio is exposed to market caps of more than 10,000,000,000. Our smallest market cap is today about about 2,000,000,000. That gives you an idea of the the the type of market cap and liquidity that we see in our in our space, but also how scalable typically that strategy is.

32:27 That's, I think, what we can say. That's what I wanted to present to you this morning. You know, we are invested here in an investment trust which has delivered over the years what's written on the tin, which maybe more importantly for you has, I think, very sound outlook ahead of ahead of us with companies actually delivering strong earnings and earnings growth and returns, are actually improving rather than deteriorating, this bodes well, especially at the time when valuations are still on the lows.

33:12 So this is what I wanted to present to you this morning on ECOFIN GLOBAL UTILITIES AND INFRASTRUCTURE TRUST, ticker EGL. Thank you all for your attention. And now I'm very happy to answer any question you may have. Thank you. That's great. Well, Jean Luc, thank you very much for your presentation. Ladies and gentlemen, please do continue to meet your questions, and you can do so just by using the q and a tab that's situated on the top right hand corner of your screen. We have received a number of questions both pre submitted and throughout today's live presentation. I want to start the q and a session off with the first one here, which reads as follows. There are a few parts to the question, so do bear with me. I understand that Saba have a significant holding in the company. Has the board or manager had any meetings with Saba that have given an insight to Saba's intentions?

34:00 Does the board and manager believe that the narrowing... That... Believe that narrowing the share price discount to NAV will eventually cause the exit of Saba as a shareholder? And finally, does the board and manager believe that the company will remain at an economically viable size after Saba are no longer a shareholder, however that occurs?

34:18 Okay. Thank you for that question. We've obviously all seen in the press that SABAL has taken stakes in quite a high number of UK investment trusts, and I've seen that EGL was mentioned in the press as as one of them. What I would say... I'm I'm not sure what the... What's the the the the source of information of this shareholder who... Who's asking the the the question. When I look at the shareholder register, the latest shareholder register of voting shares, I I don't see Saba listed in there. So I'm unable to confirm whether Saba owns a a large stake. It does not appear in the shareholder register.

35:06 Having said that, Sabah would be welcome as any shareholder. We think we have a strong investment case here, as I mentioned. On the point of discount and how proactive we are to address the the the discount to NAV of EGL, which is obviously a concern. What I would say is that our board has been very proactive to address those matters.

35:36 During the the period during which EGL was trading at a premium to its NAV, roughly between 2020 and 2023, the board, you know, aimed at growing the trust, and we did issue new shares. This proved enhancing, obviously, to existing shareholders because those issuances were made at premium premiums to NAV, we managed to increase the size of the trust. Conversely, since kind of mid twenty twenty three, so over the past couple of years, the board has been implementing a selective share buyback policy, very much selective, as I mentioned, to address the imbalances between supply and demand. And I believe this has led to some initial results leading to the current discount to NAV, which is a single digit, around 8% plus as of this morning.

36:42 So, you know, we're working on it. I think that's, you know, the best we can do to address shareholders' concerns about the discount. You know, it moved to a discount in 2023, I very much believe, together with a lot of infrastructure trusts. But we are confident that the discount is shrinking and that at some point, it may move back to a premium. The main source of that has to be the performance. And you've seen the numbers, and we hope that this will push investors to gradually bring the stock back to a premium to NAV. Now your question on the size of the trust, to be honest, no. This is not an issue. The the NAV of EGL is currently about £250,000,000.

37:36 This is well larger than it was five years ago. We think we are far from having an issue of size. Obviously, the objective, as I mentioned, remains to grow the trust. We hope it gets bigger, and I think that will be of... In the interest of all our shareholders. That's the objective. But today, no. There's no issue of size of of the trust. Thank you for your question. That's great. We'll move on to the next question. The next question here, North American holdings were the strongest regional regional contributors in May. Do you expect to maintain or increase this overweight? Or are there valuation or macro risks that could prompt a shift in regional exposure? Yes. Thank you for your question. So I did address briefly how we have adapted geographical exposure over the past few months.

38:29 Again, we allow ourselves to be nimble and opportunistic for that. And clearly, the change of administration in The US in the last autumn was for us added risk. It's well known that the current US administration is much more skeptical about support in the form of tax credit to a lot of renewable energy sources. And so we've been watching that very carefully. That's why we have reallocated all of our exposure in The US to European names over the past few months as I mentioned. What I would say is that we've had recently the outcome of the parliament's...

39:15 US parliament's discussions around the big beautiful bill and how it's going to change, notably, the IRA going forward. And I would say what we've seen in what has been finally voted by the parliament is not as bad as one could have feared, notably in the sense that it protects safe harbored projects in The US pretty much for the next five years. And all the big players we invested have safe harbored. I... They've already invested at least 5% in the project. The bulk, if not all, of their contracts. We've heard that president Trump has decided to propose an executive order in that matter. So he had he had forty five days to do that, so it remains a pending matter. Generally speaking, what I would say is that the outcome of those discussions in The US are maybe not as bad as a lot was were fearing on the market.

40:19 So it may be time to rebalance somewhat the portfolio. So, yes, we do see very attractive investment opportunities in The US, by the way, the area where we see the fastest growth potential, notably because this is where demand from data centers is the the most intense. So, yes, bound to rebalance gradually the the portfolio. That's for sure. Thank you. That's great. Turning to the next question here. Do you invest in digital infrastructure? So we do not invest in digital infrastructure digital infrastructure in terms of industrial business. As I mentioned, we we try to really avoid any industrial activity.

41:06 We're not a a tech.

41:10 We don't have a tech portfolio. We're not a tech specialist here. Having said that, we do very much have exposure to the phenomenon of growing activity from those centers. So this is this is critical to us. As I mentioned, it is definitely a booster to demand, and it's an extremely favorable driver to the companies in our universe, a lot of companies in our universe, and therefore to our portfolio. So no direct exposure to those more industrial or tech companies, but definitely a lot of exposure indirectly to the beneficiaries of the activity we are seeing in that space. That's great. Thank you very much for that.

41:57 I've got another question here. What is your view on SSC? Well, you've seen SSC among our top 10 holdings. It's a company which we find very attractive, to be honest, because of its mixed diversification. It's exposed to networks, which I mentioned earlier. It's one of the areas where where we see the fastest growth potential with no exposure to power prices, so less volatile with a favorable regulatory framework. It also has exposure to growth areas that are be through its expansion of its renewables portfolio.

42:46 SSC this year was challenged by one project by the the government, the government, envisaging considering a new system organization of the energy network in The UK based on zonal pricing. Zonal pricing would have meant that electricity prices would have been cheaper and lower in areas where you had a lot of power generation capacity. Typically, that would have affected SSE, and that's the explanation for... From our perspective of the stock's very weak performance in the first quarter of twenty twenty five. It's bounced back, and I'm sure you've read in the press this morning that the government has now officially stated

43:34 that it has abandoned the idea of putting in place a zonal pricing system in The UK. So it is a relief to SSE. So we like SSE. Top 10 holding for us, a holding which we did increase on on weakness. We see it as one of the fastest growth stocks definitely in The UK, double digit EPS growth per annum in the next three years, and trading on its own historic lows and at a big discount to the piece that we typically see in the space. So, yes, we're favorable to SEC as an investment opportunity here. Thank you very much. Got another question here from an investor. As you mentioned, net asset value growth is outpacing sector benchmarks. So the question is, what are you doing to maintain valuation discipline, especially in high growth areas like renewables and IPPs?

44:31 Well, so you've seen the chart which shows you that our portfolio tends to be cheaper cheaper than where typically listed infrastructure trade. Naturally, we focused on the cheap stocks, but, again, it's not necessarily a target in itself. It's more that we focus on the the fastest growth business models and the highest quality. And and we see a lot of valuation anomalies in in that segment. So this is where we see the best total return opportunities going forward. How do we play on this valuation gap? Well, we're not trying to be speculative here. I'm not trying to imagine which of the companies in in our space or in our portfolio are bound to be taken out by private equity specialists. That's not our investment style.

45:23 We don't wanna be speculative in our investment positioning.

45:28 We are paying a lot of attention to, again, the cash inflows of private infrastructure specialists. We believe that most likely consolidation or m and a phase is ahead of us, and that will be supportive. We see renewed activity in renewables, which is of interest to us. We tended to be quite cautious on our renewables exposure over the past three years for the reasons I I I mentioned. This is a space which has been really beaten up. And and the last point I will mention here is that as opposed to private equity specialists, we are very cautious on pure plays in our space and tend to much prefer diversified business models.

46:17 One example, a lot of you would be familiar with the name like Orsted. Orsted, you know, a world leader in offshore wind development, but pure play, kind of. We never invested in Orsted mostly because its portfolio, from our perspective, was not diversified enough. And by the way, it was at the stage where it was not paying enough dividends either to its shareholders. So we tend to very much prioritize diversified business models, very large gaps, which quite often are, I would say, beyond reach of private equity investors. So overall, our investment strategy is somewhat different. Our angle is different, but our interests are aligned in the sense that I believe, again, intensified activity from private equity infrastructure specialists will end up enhancing valuations of our investment universe and listed infrastructure and of our portfolio.

47:20 Great. Thank you very much. Turning to the next question. We've had an investor ask if you can talk about the use of gearing on the trust and how it is deployed and any evidence on effectiveness for shareholders. Sure. Thank you for that question. It's a very critical question and I only briefly alluded to it upfront in this presentation today. The trust has a facility in its status to have up to 25% gearing,

47:51 and it is very largely at the discretion of the investment manager. We've used it with caution, but a lot of opportunism in the past. If I look at the past nine years, in in average, gearing has been just above 10% roughly. It's slightly higher than that. And typically, it's a reflection of our degree of conviction in our investment universe and in the outlook of the company's and our portfolio holdings. Gearing, according to our risk management team, has been clearly enhancing to returns for our shareholders over the years. Internally, our risk management teams calculate that it's delivered close to 200 bps of incremental return per annum since inception over the first eight years up until the the the end of September twenty four last fiscal year.

48:50 So it it... It's actually very significant if you think about the incremental returns that is generated over the years. Obviously, it can work both ways. We need to be very cautious when we are facing periods of turbidences in the space. But typically, gearing has been a significant booster to the total returns that we have generated for our shareholders over the years since inception in 2016.

49:18 Thank you very much. Turning to the next question. What do you think are the biggest risks to the achievable returns in the coming years?

49:29 So I'll tell you. There's one real risk, and there's a perceived risk. The perceived risk is quite often, as I mentioned, interest rates. You know, listed equity investors are sensitive to interest rates fluctuations. As I mentioned upfront, this is an asset class. The asset class on long duration business follows, which use... Is usually unfavored by steepening yield curves because generous investors tend to leave it aside. To be honest, it's it's a factor which is much less relevant to the companies that we invest in compared to its importance for generous investors. So that's what I would call a perceived risk, which would affect, you know, short term performance of the space, not necessarily the fundamentals much of our universe because companies are very much indebted over the the the long term based on long term debt structures.

50:34 The main risk, which is always depending risk in infrastructure and utilities, is political and regulatory intervention risk. That's a risk which is almost impossible to avoid. You will always have one regulator which is going to come after the companies in its regulatory framework. You know, we've seen it in The UK when electricity prices go too high and it's not to be on the cover page of the tableau. It's well, you know what? Governments puts pressure and regulators tend to interfere notably with price caps. We are seeing it in The US. Sometimes you invest... We had that case eighteen months ago where we were invested in Illinois, a very stable regulatory framework, and then the Illinois regulator decided to cut the LR return in Illinois.

51:28 That's from from my perspective, the biggest risk, political. We've seen it in The US today, and regulatory intervention risk. How do we counter this? Very much through diversification of our portfolio. I mentioned Illinois. We had one stock, which was primarily exposed to Illinois. It took a big hit, but you know what? You hardly see it in our performance track record because it was one of our 41 positions in the portfolio. So diversification of geographies, of regulatory frameworks, of types of business models, regulated, nonregulated, and subsegments. This is the key to a a a good portfolio structure from my perspective and the key to being able to deliver regular performance and total returns for our shareholders, which is very much our objective.

52:24 That's great. We've got another question here. Do you consider yourself an ESG fund? What's about ECO in the name?

52:32 That's a that's a good question. ECOFIN, when it was founded in 1991, past century, used to stand for ecology and finance. So, yes, ecology is part of our DNA. ESG is is a term which is tricky to define today, to be honest. We... We've seen ESG used by a lot of asset managers over the years. And as we know, regulators have started to pay a lot of attention to the use of those those terms. It needs to meet something. So it's been a few years since ECOFIN has almost put aside the expression ESG to focus much more on sustainability and and maybe more important for our strategy, the effects of the energy transition.

53:26 So EGL does not pretend to have an impact focus. The portfolio doesn't have to be clean. So there's no strict ex ante

53:41 filtering of the space based on carbon intensity. Having said that, as I mentioned, we are interested in those companies that transform their business model based on the effects of the energy transition and in anticipation of the effects of the energy transition. So we use the DNA of ECOFIN's specialist focus very much to analyze those companies on those criteria, sustainability, energy transition, how management teams do adapt to those phenomenons to identify the winners in the utilities and infrastructure space worldwide. So we use it as a analytical tool much more than an ex ante filtering criteria.

54:34 Okay. Jeanique, well, for every question you answer to come in, so what I might have to do is I might have to stop you there. We have had a comment saying it's been an excellent presentation from a long time shareholder. But perhaps just before wrapping things up, if I could just ask you for a few closing comments, that would be great. Well, first of all, thank you for your participation this morning. Very good questions. I think we've covered the bulk of the investment case here and the critical matters. You know, I've been covering the space of utilities and infrastructure for many years as it's starting to show. With ECOFIN for the past eighteen years, We are passionate about about our investment specialist focus.

55:24 We are a team, an investment team. You saw the the the the photos.

55:29 We know each other very well. And my degree of conviction in the outlook for this investment universe is as strong as pretty much it's ever been. So, you know, I believe the fundamentals of the space, which are really our sole focus, our main focus, look really strong as of today. So I think we can address the the outlook for this investment universe strategy and EGL as a trust with, you know, good degree of confidence. So that's my passion and reasonable optimism that I'd like to share with you this morning. That's great. Well, Jeanne, thank you once again for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback and all the management team can better understand your views and expectations?

56:23 On behalf of the management team of ECOFIN GLOBAL UTILITIES AND INFRASTRUCTURE TRUST PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.