Investec view: 3i Infrastructure (3iN) delivered an impressive set of results for the six-month period. Strong underlying asset performance, particularly at Oystercatcher (+73.9%), was principally driven by the agreed realisation of the European storage terminals held by the business for a price above their opening valuation. All portfolio companies generated positive returns and there was also material outperformance at TCR (+34.2%) and ESVAGT (+13.0%). The most recent acquisition, DNS:NET, which was acquired in June, delivered a 5.7% return from acquisition to 30 September 2021. The total portfolio return was 14.4%, although this was diluted at the NAV level by the significant cash balance held during the period. The NAV of 291.2p/share represented a NAV total return of 10.6%, materially ahead of its target return range of 8% to 10% per annum. The total shareholder return over the period was more muted at 4.2%, although we note that the share price has performed strongly post period end and has increased a further 8.7% since 30 September. As we have noted previously, the company still has a significant cash balance to deploy in order to reach full investment. Following the sale of Oystercatcher’s European terminals and payment of the interim dividend, cash on hand, including the deferred proceeds from the WIG sale, is c.£362m (14% of NAV). As seen in recent years, cash drag continues to impact returns at the NAV level and whilst the portfolio continues to perform well, a key challenge for the company is to reach full investment again. Management confirmed that a strategic review was underway regarding its investment in ESVAGT and it is considering a sale of the business. At 30 September, ESVAGT was valued at £226m (10% of portfolio). 3iN owns 50% of the business, alongside AMP Capital. We note that any imminent sale, which we would expect to be above the current carrying value given historic realisations, would significantly increase the already sizeable cash balance held by the company. 3iN has a progressive dividend policy and is targeting a dividend of 10.45p/share for this financial year, which equates to a dividend yield of 3.2%. In our view, an interesting portfolio of economic infrastructure investments that provides a solid yield and attractive total returns represents a compelling investment case. We remain comfortable with our Buy recommendation.