BGI’s operating model is built on three core principles: value-driven active asset management, prudent financial management, and a selective investment strategy. This approach focuses on building a high-quality asset portfolio, preserving and optimising the value of the existing investments, and driving sustainable long-term growth.

Value-driven active asset management

BBGI’s active asset management approach is designed to ensure stable operational performance, preserve value and identify opportunities for value enhancements throughout the lifecycle of Company assets.

Model in action:

  • BBGI’s Portfolio Companies continued to deliver consistent operational performance in FY 2024. Through the Company’s active value-driven approach to asset management, it has achieved an asset availability level of 99.9%.
  • High client satisfaction is an important goal for BBGI and the success of those efforts is reflected with a high Net Promoter Score.
  • There were no material lock-ups or default events in the underlying debt financing agreements. As a result, all BBGI’s investments contributed positively to strong dividend cover, with net cash generated by the Portfolio Companies ahead of projections.
  • BBGI Portfolio Company cash flows benefit from high-quality inflation linkage. BBGI passes on the indexation mechanism to its subcontractors, which acts as a natural hedge to manage cost effectively. The cash flows on a net basis are positively inflation-linked as the indexation of revenues is greater than the indexation of expenses.
  • All BBGI’s assets are availability-style, meaning the revenues are unaffected by demand elasticity. The inflation adjustment is also automatic and contractual and is not subject to regulatory review or substantial lags, therefore providing strong visibility and predictability of future cash flows.
  • By implementing cost-saving initiatives, including leveraging economies of scale at the Portfolio Company level such as insurance, standardised management contracts and rigorous lifecycle cost reviews, BBGI drives sustainable cost efficiencies and long-term value.
  • BGI maintains a diverse contractor base and implement risk mitigation measures to address proactively any potential issues in its supply chain. The Management Board has thoroughly assessed the risk exposure and has not identified any significant risks.

Project hand-back

At the end of a concession, the private partner transfers the management of the project back to the public sector. This process is termed ‘hand-back’. In the majority of the hand-backs, the obligation is contractually passed down to the Facilities Management (‘FM’) provider, significantly mitigating the risks. BBGI has established transparent communication channels with its subcontractors and public partners, fostering a collaborative partnership built on measurable outcomes, including clear hand-back requirements.

Two assets representing less than 1% of BBGI’s portfolio are subject to hand-back over the next three years, in January 2026 and August 2027. Preparations for their ’hand-back‘ are progressing well. Following the Infrastructure and Projects Authority UK’s guidelines, collaborative working groups have been established, comprising representatives from the Client, the FM provider and the Portfolio Company, involved in the respective project. The FM provider bears the hand-back risk for both assets.

6% of BBGI’s portfolio consists of non-concession assets, which are not subject to hand-back.

Prudent financial management

BBGI’s prudent financial management approach emphasises maintaining a conservative capital structure, efficient cash and corporate cost management, and robust foreign exchange hedging to ensure financial resilience.

Model in action:

  • BBGI’s portfolio of high-quality Social Infrastructure investment generates inflation-linked cash flows from creditworthy counterparties which allows the Company to provide strong predictability for progressive dividend growth.
  • BBGI manages its debt facilities with discipline, expanding its portfolio carefully without overleveraging. During the FY 2024, BBGI reduced the size of its RCF from £230m to £150m, lowering commitment fees and further optimising capital structure. At Group level, financial liquidity remained robust with a net cash position, no structural gearing and strong dividend cover.
  • The refinancing of the Northern Territory Secure Facilities during the reporting period has removed all refinancing exposure from BBGI’s portfolio. With limited exceptions, borrowing costs are fixed at the Portfolio Company level, providing stability and predictability.
  • BBGI’s hedging strategy mitigates foreign exchange risk by hedging forecast portfolio distributions, balance sheet hedging through foreign exchange forward contracts and the ability to borrow in non-Sterling currencies.
  • Despite inflationary pressures, BBGI’s efficient internal management structure has kept ongoing charges at a competitive 0.92%.

Treasury management

BGI has adopted a proactive treasury management approach to optimise the interest earned on the cash reserve accounts of its Portfolio Companies. Its share of cash reserves across the Portfolio Companies was in excess of £300 million as at 31 December 2024. The elevated interest rates across all jurisdictions allowed the Company to benefit from cash pooling arrangements in the UK and Canada to maximise interest generated on cash deposits of its Portfolio Companies. BBGI earned a weighted average interest rate of approximately 4.5% across jurisdictions.

Selective investment strategy

BBGI’s selective investment strategy emphasises sustainable growth and diversification, focusing on accretive opportunities that enhance portfolio quality and construction rather than simply growing AUM.

Model in action:

  • BBGI prioritises low-risk, availability-style assets with high-quality inflation linkage, backed by creditworthy counterparties in highly rated geographies. The Company’s disciplined approach ensures investments remain within its core areas of expertise and avoids undue exposure to any single market. BBGI also has a robust framework embedding sustainability screening into investment due diligence.
  • BBGI leverages its extensive industry relationships across multiple geographies to source attractive investment opportunities, including pre-emption rights to acquire co-shareholders’ interests.
  • BBGI operates within a specialised segment of the infrastructure sector, characterised by modest-scale transactions. In recent times, a significant portion of capital has flowed into a handful of sizeable infrastructure funds, many of which have raised fund targets in excess of US$10 billion. These larger funds prioritise the deployment of substantial amounts of capital and, as a result, do not actively engage in the smaller-scaled transaction space where the Company excels. Within its market niche, it is recognised as a dependable partner and consequently has very good visibility of potential opportunities.
  • BBGI leverages its strong relationships with leading construction companies to source potential investments. Typically, these contractors have secured the mandate to design and build new assets but often look to divest financially after the construction period has finished – thereafter often maintaining facility management contracts through a long-term partnership. BBGI is an attractive partner for several reasons, including its:
    • reputation as a long-term investor, attractive to government and government-backed counterparties;
    • reliability as a liquidity provider for contractors seeking to divest;
    • ability to help construction companies avoid consolidating Portfolio Company debt onto their balance sheets;
    • extensive credentials and strong track record, enhancing the likelihood of being shortlisted for new projects;
  • BBGI has avoided value destructive acquisitions. The disconnect between private market valuations – evidenced by recent secondary market transactions in core infrastructure assets – and the valuations currently ascribed by public markets continues to persist. BBGI shares have consistently traded at a discount to NAV since April 2023, which has limited the Company's ability to issue new equity and pursue attractive investment opportunities.