Removal of nationalisation risk: The UK election result, which in effect removed the nationalisation risk to UK PFI and certain utilities, has had a notable effect on the share prices of the listed infrastructure sector – especially for HICL and INPP, which are up 11.3% and 3.3% respectively since 12th December. The BBGI share price is broadly flat over the period, primarily due to its overseas portfolio (68% of portfolio) which was not exposed to the same nationalisation risk and the fact that it was already trading at a material premium to NAV. 3iN has performed strongly (7.0%) following the successful realisations of its stakes in WIG and the UK Projects portfolio. Portfolio valuations underpinned by a significant supply/demand imbalance: This has been a key feature for a number of years and we see little to change this dynamic in the short to medium-term. Preqin estimates that fundraising in 2019 pushed ‘dry powder’ to $212bn, which is double the amount at the end of 2015. We believe portfolios in the sector remain conservatively valued, evidenced by the recent sales from the 3iN portfolio. The Projects portfolio was valued at c.£160m at 30 September 2019, and therefore the sale price of £194m will generate an uplift of c.£34m before carry, amounting to a gross IRR of 15% for 3iN. Whilst individual discount rates are not disclosed, we assume that these could be towards 5%. The sale of Wireless Infrastructure Group for proceeds of c.£387m, compared to a valuation of £291m at 30 September 2019, realised a gross IRR of 27% and a 1.7x money multiple. Lower for much longer: In its Global Financial Stability report, published in October, the IMF stated that ‘market pricing now suggests that rates will remain lower for longer than anticipated’, and last week, the Bank of England’s Monetary Policy Committee decided to keep interest rates on hold at 0.75%. For investors, the search for yield is well entrenched, although we are mindful of the increasing polarisation of investor experiences in the alternative investment company sub-sectors. We have reservations over many alternative investment companies, particularly in the specialist debt sector where a number of companies have over-promised and under-delivered. Attractive and sustainable yields: Whilst we are mindful of the significant re-rating of the listed infrastructure sector in the last two months, we believe the dividend yields available (2.9% to 4.6%) remain attractive, particularly when compared with gilts – 10 and 20-year gilts are currently yielding 0.55% and 0.97% respectively. Importantly, the sustainable and growing dividends on offer are underpinned by long-term and predictable cashflows. Recommendations: We remain positive on the sector. In terms of stock recommendations, we maintain our Buy ratings on BBGI, HICL and INPP and our Hold on 3i Infrastructure.