Gravis Capital Partners, the London-based investment advisory firm, is to launch what it says is the UK’s first infrastructure listed fund to focus primarily on subordinated debt.

Gravis believes that there is a compelling case for lending against UK infrastructure projects, in particular those contracted under the government's private finance initiative.

According to the firm, the UK infrastructure sector represents a substantial investment opportunity due to the number of PFI projects being undertaken; close to 800 PFI projects have been delivered over the last 15 years at a cost of over £45 billion (around $65 billion), the firm said.

GCP Infrastructure Investments Limited, which is a closed-ended feeder fund into an existing open-ended investment company, GCP Infrastructure Fund Limited, is targeting a yield of 8 per cent per annum. The firm is also keen to point out that investor protection will be built into the loan terms of GCP Infrastructure Investments to provide inflation protection.

“We are seeking to provide (and have provided) subordinated debt to contractors, private equity owners and senior bank lenders, many of whom we believe are keen to recycle equity tied up in these very long-term PFI projects,” said Stephen Ellis, managing partner and head of funds advisory at GCP.

“It is an attractive opportunity for investors looking to generate relatively high, long term and secure investment income."