Cordiant Digital Infrastructure Ltd (LSE:CORD, FRA:86L) remains undervalued despite sustained portfolio growth and strong operational performance, according to a research note from Kepler Partners.
The managers’ “Buy, Build, Grow” strategy continues to drive returns through targeted reinvestment and asset development.
Kepler argues this approach gives Cordiant a capital growth profile that sets it apart from other infrastructure vehicles, and sees scope for the trust’s 24% discount to narrow further if current trends persist.
Cordiant has delivered a 13.5% annualised NAV total return since launch in 2021, outperforming its own 9% target.
The research house notes this performance, which many equity funds would be “very pleased with”, has been led by the trust’s concentrated holdings in mid-sized European infrastructure companies with scalable potential.
The Czech-based CRA remains a core contributor, with revenue supported by inflation-linked contracts and rising demand in data centre operations.
Analysts at Kepler highlight the 26MW Prague Gateway project, now under construction, as a possible inflexion point for the portfolio. The asset, nominated by the Czech government as a potential EU artificial intelligence hub, could materially lift valuations once operational.
Alongside CRA, Poland’s Emitel and Ireland’s Speed Fibre added to NAV growth in the latest reporting period. NAV per share rose 8% to 140p in the six months to 30 September 2025, equivalent to 5.6% excluding currency tailwinds. Total returns over the period reached 10%.
Kepler sees the portfolio as “steadily evolving”, with capital expenditure concentrated in data centres and fibre, supported by robust free cash flow and undrawn debt facilities. Gearing stood at 40.9% of gross assets, with £84m in cash and a further £150m in available debt, as of the period end.
Dividends remain covered, with adjusted funds from operations at 1.7 times the forecast distribution. While yielding 4.1%, Kepler stresses that income plays a secondary role in the trust’s total return proposition.
Despite strong asset-level growth, Cordiant’s shares continue to trade at a material discount. Kepler believes this mispricing “continues to offer a compelling opportunity”, with the potential for further upside should interest rates fall or investor sentiment shift.