Investec view: 3iN extended its long track record of strong returns with a NAV total return of 11.4% for the year, ahead of its 8-10% target over the medium-term. This is despite Covid-19 impacting on year-end valuations. The Covid-19 crisis is unprecedented and there is inherent uncertainty around the valuation of assets given the need to assess the projected short-term impact on portfolio company cashflows, but also the longer-term impact on companies and the timing and extent of any potential recovery. This heightened uncertainty is reflected by the increase in the portfolio discount rate which has increased by 50bps over the year to 11.3%. The investment manager has also adjusted the growth of its cashflow forecasts to reflect its current expectations around Covid-19. Whilst we are cognisant that the duration and severity of the impact of Covid-19 is uncertain and may not be known for some time, we believe the portfolio to be relatively defensive given the essential services provided by the investee businesses and are encouraged by the resilient performance of the portfolio companies to date. The company is in a strong liquidity position with cash (including receivables) representing c27% of NAV. Not only does this enhance defensive characteristics but also provides it with a significant war chest to acquire assets at potentially distressed valuations when and if opportunities arise. The company has adjusted its cashflow forecasts as a result of the pandemic; however we are encouraged by the board’s decision to increase the dividend target for FY21 by 6.5% to 9.8p/share. This equates to a current yield of 3.7%, which is attractive, particularly so in an environment where dividends are under pressure. In our initiation in July 2019, we highlighted that the company traded on a material premium (c. 20%), which was primarily a function of an exceptional long-term performance record. Following the sell-off in markets, the premium to the 31 March NAV is just 3.9% and we believe this represents an attractive entry point for potential investors. Now, we believe that a combination of a defensive portfolio, an attractive yield and a strong balance sheet represent solid foundations and on balance, we upgrade to Buy (from Hold).