Business Description:
Challenger Infrastructure Fund (CIF) was established to provide investors with access to a global portfolio of utility and infrastructure investments which offer a combination of long-term, predictable income streams and potential for capital growth. CIF consists of two stapled registered managed investment schemes, CIF Investment Trusts 1 & 2.

Strategy Analysis:
CIF is looking to sell assets or the entire trust. It is a portfolio investor and doesn´t operate the underlying assets. Its original strategy was to grow aggressively through acquisitions. After floating on the ASX with three assets in 2005 it grew to six within two years via acquisitions. Then the GFC hit and CIF had to sell assets to reduce gearing, so far it has sold four. The two remaining assets - Inexus and LBC Terminals - are highly geared and exposed to weak operating conditions, requiring them to reinvest all cash flow to reduce gearing over time. Distributions to CIF have been frozen. CIF pays distributions to security holders from cash held at the fund level received from the sale of Southern Water. Apart from strengthening balance sheets, focus is on improving operating performance at the asset companies and organic growth with expansion at LBC to capitalise on solid demand for petrochemical storage and higher margin multi-utility projects at Inexus. Challenger Infrastructure Fund reported a net loss of $808,000 for the year ended 30 June 2011. Revenues from ordinary activities were $353.46m, down 9.3% from last year. Basic and Diluted EPS was (0.3) cents compared to (63.7) cents last year. The net operating cash flow was $87.12m compared to $89.24m in the pcp. The final dividend declared was 7 cents, taking the full year dividend to 14 cents compared with 14 cents last year.