Last close As at 05/08/2026
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▲ 0.20 (0.14%)
Market capitalisation
GBP2,589m
Research: Investment Companies
International Public Partnerships (INPP) has announced the partial disposal of its Public-Private Partnerships (P3) investment providing family housing for US service personnel. The £30m proceeds take INPP’s realisation proceeds over the last 18 months to c £260m (or c 10% of INPP’s portfolio value), with all exits in line with or slightly above previous carrying values. The sale proceeds will be used to support the recently increased and significantly accretive share buyback programme and towards funding its existing £35m near-term investment commitments across the transport, education and digital sectors (which INPP’s manager expects to be drawn until end-2025).
International Public Partnerships |
FHSP partial realisation with £30m exit proceeds |
Investment companies |
2 October 2024 |
Analyst
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International Public Partnerships (INPP) has announced the partial disposal of its Public-Private Partnerships (P3) investment providing family housing for US service personnel. The £30m proceeds take INPP’s realisation proceeds over the last 18 months to c £260m (or c 10% of INPP’s portfolio value), with all exits in line with or slightly above previous carrying values. The sale proceeds will be used to support the recently increased and significantly accretive share buyback programme and towards funding its existing £35m near-term investment commitments across the transport, education and digital sectors (which INPP’s manager expects to be drawn until end-2025).
INPP’s Family Housing for Service Personnel (FHSP) investment relates to seven operational P3 projects that have delivered over 21,800 family homes across 19 operational US military bases. It is INPP’s longest standing P3 asset in the US, with its first investment in 2015. The company’s investment in FHSP is in the form of mezzanine debt and the remaining investments, after the sale, were valued at £73m at 30 June 2024. Mezzanine investments form part of INPP’s risk capital investments (99% of end-June 2024 portfolio), consisting of project-level equity and/or subordinated shareholder debt.
The partial disposal of the FHSP investment is consistent with INPP’s disciplined approach to capital allocation. As part of this approach, INPP accelerated the growth in dividends to 5% in FY23 and 3% in FY24. Going forwards, its capital allocation approach will continue to be guided by three principles: 1) targeted asset disposals to both demonstrate portfolio value and reallocate capital; 2) prudent use of INPP’s corporate debt facility (which was fully repaid and downsized to £250m earlier this year); and 3) use of exit proceeds for accretive share buybacks and new investments (subject to their medium- to long-term economics being more attractive than share repurchases). INPP’s buyback programme was introduced in early 2024 and was recently increased in size from £30m to up to £60m, of which INPP had invested £22.5m as of 27 September.
The latest transaction is another indication of the company’s continuing efforts to narrow the discount to NAV. As we wrote recently in our update note in September 2024, although these have gained some traction, the discount remains at c 14%. This is not out of line with the broader investment company sector and a greater appreciation of the quality of INPP’s cash flows, a decline in interest rates and the prospects for accretive reinvestment may prove more potent factors in a re-rating. Meanwhile, the shares offer an attractive 6.5% yield and the expected future return from investing at the current discount to NAV is more than 9% pa.
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Research: Healthcare
Oryzon Genomics has confirmed the FDA’s alignment with its proposed Phase III programme for vafidemstat in borderline personality disorder (BPD). Notably, the FDA acknowledged agitation and aggression (A/A) as a therapeutic indication and, as such, the State-Trait Anger Expression Inventory 2 (STAXI-2) Trait Anger may be used as a primary endpoint for Phase III (PORTICO-2). We note that vafidemstat showed statistically significant benefit by this measure in the prior Phase IIb PORTICO trial. We view the news as encouraging and believe there is a sizeable opportunity for Oryzon to develop an effective treatment for BPD, for which there are currently no approved drugs. Next steps are to submit a full trial protocol for PORTICO-2 to the FDA (expected within Q125), before a potential trial launch from H225, contingent on regulatory clearance and providing that there are no other delays.