HICL Infrastructure and TRIG to merge in £5.3bn deal to create UK’s largest listed infrastructure trust

HICL Infrastructure PLC and The Renewables Infrastructure Group Limited have signed a landmark agreement to combine their portfolios and operations, creating what will become the largest listed infrastructure investment company in the United Kingdom. With net assets projected to exceed £5.3 billion upon completion, the merger reflects a deliberate strategic repositioning of both companies to capture a broader swathe of core and energy transition infrastructure opportunities.

The deal, expected to be finalised in the first quarter of 2026, will be structured as a voluntary winding-up of The Renewables Infrastructure Group under Guernsey law. TRIG’s assets will be transferred to HICL Infrastructure in exchange for newly issued HICL shares and a cash component, offering shareholders flexible participation via rollover or exit. The boards of both investment trusts have endorsed the merger following consultation with major shareholders and an extensive market-sounding process.

Not only does the proposed combination aim to deliver scale, liquidity and portfolio diversification, it also sets an ambitious financial target: a NAV total return of over 10 percent per annum and a new annual dividend target of 9.0 pence per share. This represents a notable enhancement compared to prior guidance from both entities and reflects the boards’ confidence in the synergies and expanded mandate of the merged platform.

What is the strategic rationale behind combining HICL and TRIG into a single infrastructure platform?

The merger is designed to position the new entity to benefit from the growing convergence of traditional core infrastructure and energy transition assets. Historically, HICL Infrastructure PLC has focused on core infrastructure, including social infrastructure projects under the UK’s private finance initiative, as well as regulated utilities, transport concessions, and digital networks across eight geographies. As of 31 March 2025, HICL held more than 100 assets with a net asset value of £3.0 billion.

The Renewables Infrastructure Group Limited, on the other hand, was launched in 2013 with a focus on operational solar and onshore wind assets. Over time, its portfolio evolved to include offshore wind and battery storage, spanning over 2.3 GW across 80 assets. As of 30 September 2025, TRIG’s net asset value stood at £2.6 billion. The renewables investment trust has also become active in project development and construction, with over 20 percent of its current assets built directly.

With infrastructure market dynamics shifting and investor sentiment influenced by broader macroeconomic conditions, both companies recognised the need to adapt. By combining resources, the new trust aims to bridge the divide between steady, availability-based infrastructure cash flows and the higher-growth profile of clean energy and storage assets. The boards of HICL and TRIG believe this combination will create a vehicle capable of deploying capital across the full infrastructure spectrum, improving resilience, access to capital, and long-term shareholder returns.

How will the HICL Infrastructure and TRIG merger structure work for shareholders choosing between the cash exit and the new share exchange mechanism?

The combination will be implemented through the winding-up of The Renewables Infrastructure Group and a transfer of its assets to HICL Infrastructure in exchange for new HICL shares and a partial cash option. TRIG shareholders may elect to receive new HICL shares based on a formula asset value-for-asset value exchange ratio, calculated using the respective net asset values as at 30 September 2025.

Based on illustrative calculations using published NAVs, each TRIG share would convert to approximately 0.714173 of a HICL share. TRIG shareholders are also offered the choice of a partial cash exit of up to £250 million in total, representing roughly 11 percent of TRIG’s issued share capital. This cash exit is priced at a 10 percent discount to TRIG’s adjusted NAV per share as of the valuation date.

Importantly, Sun Life Financial Inc., the parent of InfraRed Capital Partners, which manages both HICL and TRIG, has agreed to provide an additional £100 million in liquidity and secondary market support for the new company. This brings the total liquidity package backing the transaction to £350 million. Assuming full take-up of the £250 million cash exit, post-deal shareholding is expected to be split 56 percent HICL and 44 percent TRIG.

Documentation detailing the transaction is expected to be distributed to shareholders in the coming weeks, with general meetings scheduled for December 2025. The merger will remain subject to regulatory approvals, lender consents, shareholder votes, and finalisation of the detailed scheme documents.

How will the merged HICL Infrastructure and TRIG platform deliver its 10 percent return target while achieving cost efficiencies through revised fees and scale benefits?

The combined company will pursue an investment strategy aligned with three core infrastructure megatrends: energy transition, digitalisation, and demographic change. The intention is to deliver an NAV total return exceeding 10 percent per annum, underpinned by a 9.0 pence per share annual dividend, which marks a step-up from current distributions. Quarterly dividends are expected to commence at this new rate post-completion and continue through FY2026 and beyond.

Operationally, the combined platform expects to benefit from material cost efficiencies. The investment management and operational agreements with InfraRed Capital Partners and Renewable Energy Systems Limited will be amended to reflect a unified, performance-aligned fee structure. The revised management fee will be tiered and capped at a level that ensures alignment with NAV growth.

Based on current projections and fee revisions, the combined company expects an operating expense ratio in the range of 92 to 96 basis points, below the typical level for peer infrastructure funds. This includes revised fee rates for RES tied to the renewables portion of the portfolio, with a reduced tiered structure scaling with NAV and market capitalisation.

How have public markets and infrastructure fund investors reacted to the HICL and TRIG merger announcement, and what are the key risks being priced in?

Initial market reactions suggest cautious optimism tempered by execution concerns. On announcement, shares in HICL Infrastructure fell by approximately 8 percent, while shares in The Renewables Infrastructure Group rose slightly. The differential reflects varying shareholder expectations: TRIG investors likely see a pathway to value realisation, while HICL holders may be evaluating dilution and strategy integration risks.

Investment analysts tracking UK listed infrastructure funds highlight several points. First, the combined trust’s scale could unlock greater index eligibility, including potential inclusion in the FTSE 100. Second, the diversified asset base across renewables, transport, regulated utilities, and digital infrastructure could attract a broader investor base. However, some investors have flagged mandate drift concerns, particularly for those who previously backed a pure-play renewables trust or a low-risk core infrastructure profile.

Institutional flows into UK listed infrastructure trusts have been under pressure due to macroeconomic volatility, interest rate shifts, and discount-to-NAV widening across the sector. The merger, if successful, could signal a reset and a new model for scale-driven total return strategies. Analysts believe execution against stated performance metrics, especially NAV growth and dividend coverage, will be critical in restoring investor confidence.

What is the post-merger roadmap for HICL and TRIG, and how will board governance, leadership roles, and rebranding evolve after completion in 2026?

Once the transaction is finalised, the merged entity will operate under a refreshed board structure comprising directors from both HICL and TRIG. Mike Bane will serve as Chair, with Richard Morse, the current TRIG Chair, assuming the role of Deputy Chair and Chair of the Capital Allocation Committee. Other roles include Frances Davies as Senior Independent Director and John Whittle as Audit Committee Chair, among others.

All directors will be subject to re-election at the next annual general meeting in 2026. The new board has stated that a post-transaction review of its composition will be conducted to streamline governance and board size.

The name of HICL Infrastructure PLC is also expected to change following the completion of the merger, subject to shareholder approval at the 2026 AGM. This rebranding will reflect the combined identity and investment mandate of the new entity.

Operationally, both InfraRed and RES will maintain continuity in managing the infrastructure and renewables portions of the portfolio. Revised investment management and operational management agreements will govern this setup from the effective date, ensuring the integration of teams and the continuation of expertise from both legacy platforms.

How could the HICL and TRIG merger reshape the future of UK-listed infrastructure trusts amid shifting investor preferences and sector consolidation trends?

This transaction may represent a watershed moment for UK-listed infrastructure funds. It reflects the need for scale, mandate diversification, and investor alignment in an evolving market that is increasingly shaped by the convergence of legacy infrastructure and energy transition investment themes.

The model of combining via NAV-aligned share issuance, supplemented by a partial cash option and secondary market liquidity commitments, could serve as a blueprint for other struggling or undervalued investment trusts. It also demonstrates that large-scale consolidation is possible without triggering steep value destruction, provided the underlying asset base is strong and the strategic rationale is clear.

For institutional investors, this merged platform offers exposure to a hybrid of stable, long-duration cash flows and selectively higher-returning growth assets. If successful in delivering its NAV return and dividend targets, the combined company could regain pricing power, reduce its discount to NAV, and even pave the way for further sector consolidation.

What are the key takeaways from the HICL Infrastructure and TRIG merger announcement?

The proposed combination of HICL Infrastructure PLC and The Renewables Infrastructure Group Limited marks one of the most significant restructurings in the UK’s listed infrastructure sector. Below are the most important developments and strategic highlights that investors and analysts should note:

• HICL Infrastructure PLC and The Renewables Infrastructure Group Limited will merge to form the UK’s largest listed infrastructure investment trust with net assets exceeding £5.3 billion.
• The transaction will be structured via a Guernsey-law reconstruction and voluntary winding-up of TRIG, transferring its assets to HICL in exchange for new HICL shares and up to £250 million in optional cash consideration.
• Shareholders can opt for either rollover HICL shares or participate in the partial cash exit priced at a 10 percent discount to TRIG’s NAV, with the illustrative share exchange ratio currently set at 0.714173.
• Sun Life Financial Inc. will provide an additional £100 million in secondary market support, raising the total liquidity backing the deal to £350 million.
• The combined platform targets a NAV total return exceeding 10 percent per annum and a 9.0 pence per share annual dividend, reflecting a step-up from prior payout levels.
• Management continuity is preserved through InfraRed Capital Partners and Renewable Energy Systems, both of which will continue their roles with adjusted fee structures to improve efficiency.
• The operating expense ratio for the combined entity is expected to fall within the range of 92 to 96 basis points, supported by revised tiered management fees and greater capital flexibility.
• Upon completion, HICL shareholders are expected to hold approximately 56 percent of the combined company, with TRIG shareholders holding about 44 percent.
• A rebranding of the merged entity is planned for 2026, subject to shareholder approval, along with board integration and future director rationalisation.
• The transaction signals a broader trend toward consolidation in the UK’s listed infrastructure and renewables fund sector, as investment mandates converge and investor appetite shifts toward scale and diversification.