Reading back over my notes for last week’s column, I was struck by a comment Matt Dimond, head of client capital at the investment adviser to Sequoia Economic Infrastructure Income (SEQI), made about buybacks.
According to analysts at Winterflood Securities, the trust has been the biggest relative buyer of its own shares within its sector, purchasing 9.8 per cent of its in-issue share capital since the start of 2023. You’d think this self-originated demand would improve the price of a fund that has held its net asset value (NAV) better than most out there. But apparently not.
“[Buybacks] help provide liquidity, and are a good signposting from the board that we are really confident in the business,” Dimond told me. “But in the scheme of the cash flows coming in and out, they do not move the needle – we could double it and it wouldn’t change things.”