Dalmore Capital’s investment focus is on lower volatility infrastructure assets, particularly in the UK. For Dalmore, low volatility assets are those without significant exposure to GDP, traffic/usage or market price risk.
Dalmore’s investor base brings long-term capital with moderate return requirements. However, these conservative investors also expect stable assets with limited variance in out-turn returns under a range of scenarios.
Secondary stage investments will have an operational history and limited exposure to construction risk. As the public sector will be paying for the use of the facility at this stage, the investment should provide a regular flow of distributions to investors.
Primary stage investments are exposed to the construction phase and may also be exposed to the bidding and development stages. Construction obligations are passed down to experienced sub-contractors under fixed-price date-certain contracts, but there may be residual exposure to investors if the contractor does not perform adequately or suffers financial distress. Primary stage investments should offer a premium return for this exposure.
Dalmore Capital has a long-term investment horizon with a buy and hold strategy, typically of 15 to 25 years, which broadly matches the duration of the assets in which Dalmore invests.