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Investing in Green Infrastructure Funds (ITs)

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
UncleEbenezer
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Re: Investing in Green Infrastructure Funds (ITs)

#227232

Postby UncleEbenezer » June 5th, 2019, 3:27 pm

Newsflash: John Laing and Foresight to merge in this sector. That is to say, Foresight to take over managing JLEN, lock, stock and barrel.

https://www.investegate.co.uk/article.a ... 700151458B

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Re: Investing in Green Infrastructure Funds (ITs)

#227260

Postby PrefInvestor » June 5th, 2019, 5:18 pm

UncleEbenezer wrote:Newsflash: John Laing and Foresight to merge in this sector. That is to say, Foresight to take over managing JLEN, lock, stock and barrel.

https://www.investegate.co.uk/article.a ... 700151458B


Thanks for this, and I have read it through a number of times - but am still not sure what it really means. For investors in JLEN is this going to just be a name change and little else ?. Thats how I read it but confess I'm not sure.

Or are they going to merge it with Foresights own green energy IT FSFL - but I saw no mention of that anywhere......?.

Appreciate hearing other peoples opinions.

Thanks

Pref

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Re: Investing in Green Infrastructure Funds (ITs)

#227287

Postby BusyBumbleBee » June 5th, 2019, 6:47 pm

PrefInvestor wrote:
UncleEbenezer wrote:Newsflash: John Laing and Foresight to merge in this sector. That is to say, Foresight to take over managing JLEN, lock, stock and barrel.
https://www.investegate.co.uk/article.a ... 700151458B

Thanks for this, and I have read it through a number of times - but am still not sure what it really means. For investors in JLEN is this going to just be a name change and little else ?. Thats how I read it but confess I'm not sure.

Or are they going to merge it with Foresights own green energy IT FSFL - but I saw no mention of that anywhere......?.

Appreciate hearing other peoples opinions.Thanks Pref

Hi PrefInvestor, You must forgive UncleE's hyperbole. He knows the group (as do I) wearing their VCT hat where they have not exactly covered themselves in glory except for Foresight Solar & Infrastructure Vct Plc (FTSV) which has done well for investors as well as the Foresight group as manager.

What the announcement says is that Foresight are taking over as manager from John Laing Capital Management ("JLCM") and the key staff are joining Foresight - which is good as they have the expertise in waste management. In the short term therefore there will be no change - except for the name :(

In the medium term we will have to see whether they are better or worse. FSFL holds its SPVs in a very complicated structure (I know not why) whereas JLEN holds them directly. FSFL is more heavily geared as of last annual reports. If the best ideas from both teams are used then it could be a very good move.

However they (Foresight) do tend to think outside the box a bit and FTSV investee companies use at least some of their profits to buy more assets - something which under the new rules is forbidden at VCT level. Albion and the Ventus twins could do the same but they don't.

I don't think it is a bad move (as they are my two favourites of the six) but I am sad that we are losing a bit of diversity among managers. If they did merge then the larger entity would be FT250 material.

with kind regards - BBB

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Re: Investing in Green Infrastructure Funds (ITs)

#227288

Postby UncleEbenezer » June 5th, 2019, 6:50 pm

I don't know what it'll mean for investors. On the face of it, just a name change and perhaps a pooling of teams. But it could be more positive than that: my experience with the Foresight solar VCT is that being in a stable alongside a wider range of similar investments was sometimes beneficial for investors.

JLEN was on the list of potential candidates to sell (raising money for a house purchase). More food for thought there.

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Re: Investing in Green Infrastructure Funds (ITs)

#227290

Postby BusyBumbleBee » June 5th, 2019, 6:57 pm

This announcement this morning
https://www.investegate.co.uk/gore-stre ... 00101517B/

Could mean a step change in the fortunes of this company which has lacked scale in the past. They say

The Board of Gore Street Energy Storage Fund (ticker: GSF), is pleased to announce that the Company has entered into agreements to acquire a controlling interest in a 160 MW portfolio of projects ("Projects") in Northern Ireland and the Republic of Ireland (the "Acquisitions"). To fund the Projects and further pipeline, the Company also announces a proposed issue by way of an institutional placing, offer for subscription and intermediaries offer to raise up to £50m (the "Issue") and a subsequent placing programme of new Ordinary Shares and/or C Shares (the "Placing Programme"), conditional on shareholder approval and the publication of a prospectus. £31m has already been committed for investment in the Company, subject to the satisfaction of certain conditions. Of this £31m, £6m will be invested as part of the Issue and a further £25m is to be invested following the Issue by the National Treasury Management Agency ("NTMA") (as controller and manager of the Ireland Strategic Investment Fund ("ISIF")).


They suggest that this deal could lead on to greater things. Price ticked up a couple of pence on the news but it is still at a substantial discount.

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Re: Investing in Green Infrastructure Funds (ITs)

#228236

Postby PrefInvestor » June 10th, 2019, 8:51 am

TheMotorcycleBoy wrote:
PrefInvestor wrote:UKWs last placing was in February 2019 (just look at the RNS list for the full details). That was at 127p and for institutional investors only as I recall. I remember thinking that the share price might fall back to close to 127p and set a limit order to buy at 128.5p, but it never got filled.... make of that what you will for this time around.

Hi Pref,

Thanks for the SP tip.

Matt


Hi Matt,

So did you buy any after all ?. Price has moved up nicely since.

ATB

Pref

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Re: Investing in Green Infrastructure Funds (ITs)

#228250

Postby TheMotorcycleBoy » June 10th, 2019, 9:35 am

PrefInvestor wrote:
TheMotorcycleBoy wrote:
PrefInvestor wrote:UKWs last placing was in February 2019 (just look at the RNS list for the full details). That was at 127p and for institutional investors only as I recall. I remember thinking that the share price might fall back to close to 127p and set a limit order to buy at 128.5p, but it never got filled.... make of that what you will for this time around.

Hi Pref,

Thanks for the SP tip.

Matt


Hi Matt,

So did you buy any after all ?. Price has moved up nicely since.

ATB

Pref

Sorry I forgot to reply this thread! I most certainly did, I picked some up at 135.74p. It didn't seem to drop much more than that, so seeing the recent rise, I'm quite chuffed.

Many thanks on your tip, re. your earlier failed order - that greatly helped me pick my parameters!

Matt

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Re: Investing in Green Infrastructure Funds (ITs)

#228257

Postby UncleEbenezer » June 10th, 2019, 9:55 am

BusyBumbleBee wrote:They suggest that this deal could lead on to greater things. Price ticked up a couple of pence on the news but it is still at a substantial discount.

I looked at that with quite a lot of interest. I can't remember what it was, but something in the announcement deterred me from investing. I think it may have been something that suggested to me an attitude of treating small retail investors as cannon-fodder, but without a clear memory that's just a guess (was it a dilutive placing? Is someone getting over-handsomely rewarded?).

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Re: Investing in Green Infrastructure Funds (ITs)

#228262

Postby BusyBumbleBee » June 10th, 2019, 10:07 am

Well, UncleE, it moved me to buy some - will have to see whether it pays off - kind regards - BBB

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Re: Investing in Green Infrastructure Funds (ITs)

#228480

Postby PrefInvestor » June 10th, 2019, 7:21 pm

TheMotorcycleBoy wrote:Many thanks on your tip, re. your earlier failed order - that greatly helped me pick my parameters!
Matt


Well looking at a detailed chart today looks like you might have been able to get them a little bit cheaper, but not a whole lot. Hard to tell what the lowest offer price was. Probably better to do that than do what I did last time round which meant that my order never got filled !.

140 close today - cant be bad. Was 143 not long ago, lets hope we soon get back there.

ATB

Pref

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Re: Investing in Green Infrastructure Funds (ITs)

#228560

Postby TheMotorcycleBoy » June 11th, 2019, 6:36 am

PrefInvestor wrote:
TheMotorcycleBoy wrote:Many thanks on your tip, re. your earlier failed order - that greatly helped me pick my parameters!
Matt


Well looking at a detailed chart today looks like you might have been able to get them a little bit cheaper, but not a whole lot. Hard to tell what the lowest offer price was. Probably better to do that than do what I did last time round which meant that my order never got filled !.

140 close today - cant be bad. Was 143 not long ago, lets hope we soon get back there.

ATB

Pref

Yup. Funny things these Green ITs. So presumably we'll get another cheap pop at one of these the next time we see hear of a shares issue?

Matt

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Re: Investing in Green Infrastructure Funds (ITs)

#228686

Postby noshow1 » June 11th, 2019, 1:27 pm

Hi All,
He next green fund to have an offer is SEQUOIA ECONOMIC INFRASTRUCTURE INCOME FUND LTD (SEQI) NPV the shares are trading at 112.40p as I type and the offer is 108p the offer closes around 17th June. The yield is around 5.35%.

There are two parts to the offer.
1) Open offer where 1 New Ordinary share for every 8 Existing Ordinary shares held at an Issue Price of GBP1.08 per New Ordinary share.In addition, you may apply for excess shares under the Excess Application Facility, up to a maximum number of shares equal to 62.5 percent of the number of Existing Ordinary shares held on the Record Date, 30th May 2019
2) Offer for subscription in multiples of 1000 shares.

I have only just recently held these shares at an average cost of 111p.
It looks like they did an offer last year in September at 106p.So it seems they regularly raise new money via offers.
So after the success I have had with UKW I’m going to try and double my holding in Sequoia.

Regards

Steve

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Re: Investing in Green Infrastructure Funds (ITs)

#228701

Postby BusyBumbleBee » June 11th, 2019, 2:51 pm

Hmmm...
This is how they describe themselves see https://www.seqifund.com/
Sequoia Economic Infrastructure Income Fund (SEQI.LN) invests in income-generating economic infrastructure debt, creating attractive risk adjusted returns for shareholders from its diverse portfolio of private debt and bond investments, across twelve mature jurisdictions and a range of sectors and sub-sectors.

The Fund is a constituent of the FTSE 250 Index of the London Stock.

The debt breakdown is
Transport, 18.4%
Accommodation, 8.2%
Other, 13.1%
TMT, 12.2%
Utility, 16.6%
Transport Assets, 7.5%
Renewables, 10.3%
Power, 13.8%

Not sure this counts as a green infrastructure fund - although I have been keeping an eye on it. If I was a holder I would take up the offer with a yield north of 5.36%

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Re: Investing in Green Infrastructure Funds (ITs)

#228737

Postby PrefInvestor » June 11th, 2019, 4:18 pm

Well I hold SEQI and I have applied for the offer. Personally I see SEQI as a debt investment some of which is renewable related, but it doesn’t own or operate any renewable assets like the other green infrastructure trusts discussed earlier in this topic.

ATB

Pref

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Re: Investing in Green Infrastructure Funds (ITs)

#229178

Postby BusyBumbleBee » June 13th, 2019, 11:58 am

JLEN put up its full year results this morning see https://www.investegate.co.uk/john-lain ... on%20Alert

Headlines (already published so not really news) are:

a) NAV per share 104.7 pence from 99.6 pence at 31 March 2018;
b) Next year dividend target is 6.66 pence per share up from the 6.51 pence this year. Dividend cover is 1.2 on a measure of "cash flow from operations of the Company of £35.6 million covered the cash [dividends]"

the NAV increase comes from the summation of several factors

Up because they have extended the life of some assets
Up because of increase in forecast electricity prices (£2.1 million increase across the portfolio) [my calculations give this as 0.42 pence per share]
Up because of better financing improved the valuation of the constituent assets by c.£8.5 million in total through reduction of future financing costs; [my calculations give this as 1.71 pence per share]
Up because Renewable Energy Guarantees of Origin ("REGO") now have a value (added £1.1 million to the portfolio or about 0.2 pence per share)
Up because of improved terms for AD gas etc (added £1.6 million to portfolio or about .03 to NAV)
Up because of savings on Management Services Agreements ("MSA") of about £0.5 million

Down (1.7 pence per share) because of Ofgem's Targeted Charging Review which means they probably won't get extra for being close to customers (applies probably to all wind and solar REITS)

they give a figure for prices received for electricity thus:

The average all-in price received by the differing technology classes in the UK for their energy volumes generated in the year ended 31 March 2019 was £92 per MWhe for onshore wind (31 March 2018: £78 per MWhe), £190 per MWhe for solar (31 March 2018: £192 per MWhe) and £101 per MWhth for AD (31 March 2018: £93 per MWhth).
which I haven't seen from any of the others.

All in all an interesting report - with good information. Worth a read. There may be some aspects which transfer across to other Green Infrastructure funds - if I think of any I will let you know.

Prices/yields NAV as of today

Code: Select all

Stock  Bid           Offer     Dividend    Yield Bid   Yield Offe   NAV    Premium
BSIF     127.50      128.50               7.68    6.02%   5.98%     113.44    13.28%
Jlen     116.50      117.50               6.66    5.72%   5.67%     104.70    12.23%
TRIG     127.20      127.40               6.64    5.22%   5.21%     111.60    14.16%
FSFL     118.00      119.00               6.76    5.73%   5.68%     110.00    8.18%
UKW     139.60      139.80               6.94    4.97%   4.96%     123.10    13.57%
NESF     118.50      119.50               6.65    5.61%   5.56%     108.80    9.83%

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Re: Investing in Green Infrastructure Funds (ITs)

#229180

Postby Gan020 » June 13th, 2019, 12:05 pm

Does anyone understand this? It's copied from today's BBC business live feed. What it appears to say is that that although the renewable energy suppliers are guaranteed their income they still have to sell it to the grid even if they pay the grid. I am interested because I didn't appreciate there was this sort of risk involved for renewable energy suppliers (accepting that it probably varies by company starting at zero) and I don't understand if it costs money to sell it to the grid why they don't simply turn off the wind turbines or pull the plug on the solar farms


Anyone in the UK might remember the sunny, breezy days parts of the UK enjoyed in late May. As a result, on one of those days, the wholesale price for electricity - usually £50 per megawatt hour - turned negative for nine hours.

What's going on? Professor Michael Grubb, chair of the government panel on technical experts, told BBC Radio 4's Today Programme that on that sunny, breezy days when the prices turned negative - May 26 - the renewable energy providers wanted to sell as much power as possible.

Renewable energy has a fixed price so "they bid against each other until the prices went negative. So they paid out to the system but they got their guaranteed payments"

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Re: Investing in Green Infrastructure Funds (ITs)

#229191

Postby SalvorHardin » June 13th, 2019, 12:38 pm

Gan020 wrote:Does anyone understand this? It's copied from today's BBC business live feed. What it appears to say is that that although the renewable energy suppliers are guaranteed their income they still have to sell it to the grid even if they pay the grid. I am interested because I didn't appreciate there was this sort of risk involved for renewable energy suppliers (accepting that it probably varies by company starting at zero) and I don't understand if it costs money to sell it to the grid why they don't simply turn off the wind turbines or pull the plug on the solar farms

It can be quite expensive to turn power plants off and to later restart them. Producers who accept negative prices are taking the view that it's cheaper to pay someone to take their power rather than stop producing. In some cases a producer may have no choice as they are required to deliver power in order to stabilise the network.

Negative prices arise when demand (and storage capacity) cannot take all of the power that's being produced. The power has to go somewhere; the system works by encouraging producers to take power off the grid. The producers either accept negative prices or pay the costs of stopping and then restarting.

https://www.epexspot.com/en/company-inf ... ive_prices

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Re: Investing in Green Infrastructure Funds (ITs)

#229219

Postby BusyBumbleBee » June 13th, 2019, 1:58 pm

SalvorHardin wrote:It can be quite expensive to turn power plants off and to later restart them. Producers who accept negative prices are taking the view that it's cheaper to pay someone to take their power rather than stop producing. In some cases a producer may have no choice as they are required to deliver power in order to stabilise the network.

Negative prices arise when demand (and storage capacity) cannot take all of the power that's being produced. The power has to go somewhere; the system works by encouraging producers to take power off the grid. The producers either accept negative prices or pay the costs of stopping and then restarting.

https://www.epexspot.com/en/company-inf ... ive_prices

Quite often Renewable Energy Generators have a Power Purchase Agreement in place - you can find out more about these here https://www.statkraft.co.uk/power-purch ... er-market/

It is comparatively easy to reduce output from a wind farm - feather the blades - and the larger ones, I am told, sometimes receive instructions to do just that. Solar is a little more difficult. If you read the article pointed to, you will find though that the smaller wind farms - particularly those in the south have a big advantage in that they are close to the consumer. Thus it says
Projects that are connected directly to the lower voltage Distribution Network rather than the higher voltage transmission network are also known as Embedded or Distributed Generators. As these projects are located close to the areas they supply they net off demand and reduce pressure on the system. Such projects are eligible to receive various embedded benefits such as the Generator Distribution Use of System (GDUoS) benefit. The benefits are paid by the DNOs to suppliers and passed through to Generators in their PPAs.


However, to make maximum use of renewables in the future, we will need much more battery storage - which is why I am so interested in Gore Street Energy (GSF) and RedT Energy (RED) as well as what National Grid is doing to encourage more installations. Unfortunately the EU has not helped here by suspending the capacity market which the chairman of Gore mentioned in his annual report:

Energy storage is a new market and as such it is undergoing continued and transformative growth in the UK and globally. It is a key part of government energy policy as it helps to deliver the low-carbon electricity sector that is the stated goal of the UK, the EU and many other nations and areas. In November 2018, the Investment Advisor commented on the news that the UK capacity market had been suspended following an EU decision that the process for obtaining EU State Aid clearance was flawed. These two events have led to a small fall in frequency response prices and temporary loss of capacity payments. The UK and the EU are working to address the procedural issues and reinstate the capacity market. In the interim, the Company has prudentially taken into account the impact of the absence of the capacity market in the short term, which has had a negative impact on asset values.

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Re: Investing in Green Infrastructure Funds (ITs)

#229721

Postby Gan020 » June 15th, 2019, 2:16 pm

Some great replies on how the electricity is generated, stored and manged to meet demand. Thanks.

But I remain puzzled on the tariff question. I had understood much of the attraction of this sector was that it provided almost a fixed income as the generation tariffs were guaranteed by contracts that run for say another 20 years. If on occasion they are forced to pay to supply electricity to the grid then their income would appear to be not fixed.

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Re: Investing in Green Infrastructure Funds (ITs)

#229911

Postby BusyBumbleBee » June 16th, 2019, 1:46 pm

Gan020 wrote:... But I remain puzzled on the tariff question. I had understood much of the attraction of this sector was that it provided almost a fixed income as the generation tariffs were guaranteed by contracts that run for say another 20 years. If on occasion they are forced to pay to supply electricity to the grid then their income would appear to be not fixed.
Nothing is ever as it seems on the surface and I will try to get more figures for you but essentially the money the renewable energy generators come from two sources :

a) Government incentives (FiT and ROC) RPI linked payments which last for 20 years in the main. What started off as simple scheme has become steadily more complex (see https://www.ofgem.gov.uk/environmental- ... riff-rates) and is dependent on when the installation came on line. But the rate is fixed at the start and is 'guaranteed' for the duration.

b) price paid for power. This is where the skill and knowledge of the investment advisors come in, Do they fix a price for x years or ... and each manager will have slightly different views.

there are a number of other factors which affect income (and therefore NAV) and some of those I listed in my earlier post viewtopic.php?p=229178#p229178

Hope this is useful - regards - BBB


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