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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.
richfool
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Re: Investing in Green Infrastructure Funds (ITs)

#265753

Postby richfool » November 20th, 2019, 12:02 pm

Has anyone thought about one of the energy storage funds/trusts, such as: Gresham House Energy Storage Fund (GRID) or Gore Street Energy Storage Fund (GSF)?

This must be a development area as the various suppliers of renewable energy seek ways to store their energy. I appreciate that the development of batteries is in its early stages.

Both the funds in question are relatively new, trade at at modest premiums: 4.4% & 5.35% and offer yields of: 2.40% & 3.09%

https://www.hl.co.uk/shares/shares-sear ... rd-gbp0.01

https://www.hl.co.uk/shares/shares-sear ... nd-plc-ord

https://citywire.co.uk/funds_insider/in ... ePeriod=12

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Re: Investing in Green Infrastructure Funds (ITs)

#265765

Postby UncleEbenezer » November 20th, 2019, 12:41 pm

richfool wrote:Has anyone thought about one of the energy storage funds/trusts, such as: Gresham House Energy Storage Fund (GRID) or Gore Street Energy Storage Fund (GSF)?

If you read back over this thread, you'll find some mention, including something by BBB in his analysis of the sector. I think one or two have said they're invested.

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Re: Investing in Green Infrastructure Funds (ITs)

#265766

Postby BusyBumbleBee » November 20th, 2019, 12:46 pm

richfool wrote:Has anyone thought about one of the energy storage funds/trusts, such as: Gresham House Energy Storage Fund (GRID) or Gore Street Energy Storage Fund (GSF)?

This must be a development area as the various suppliers of renewable energy seek ways to store their energy. I appreciate that the development of batteries is in its early stages.

Both the funds in question are relatively new, trade at at modest premiums: 4.4% & 5.35% and offer yields of: 2.40% & 3.09%

Yes, RichFool, I invested in Gore when they first announced their Irish project which give a firm base for moving forward. They have crept up from what was a low then to give me a '12+% uplift in the SP and a forward yield of 7.2% - they have met their target, so far, of a 7 pence per year dividend. But it is a very small fund: less than £40 million. Unsurprisingly they still trade below their issue price - it often pays to wait to buy in,

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Re: Investing in Green Infrastructure Funds (ITs)

#265770

Postby PrefInvestor » November 20th, 2019, 12:54 pm

richfool wrote:Has anyone thought about one of the energy storage funds/trusts, such as: Gresham House Energy Storage Fund (GRID) or Gore Street Energy Storage Fund (GSF)?


Hi richfool, These are very small funds, not done a lot price-wise and low dividends 2-3% according to HL. So I really dont see much to attract me to invest ?.

All of the renewable energy funds seem to be adding battery storage to their installations, especially solar installations, so by investing in those one is promoting battery storage use. I guess GIRD/GSF are probably involved in load balancing for NG as well, but is there much money in that ?.

No I'm steering clear right now. Could be wrong as always. Never want to be a trend setter me !!.

ATB

Pref

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Re: Investing in Green Infrastructure Funds (ITs)

#265783

Postby Alaric » November 20th, 2019, 1:45 pm

richfool wrote: Presumably if I bought any of these Jersey/Guernsey based trusts in my non-sheltered share dealing account, I would have the hassle of declaring them (as an offshore investment) for tax purposes?


There's no withholding tax, so it's just a matter, like REITs, of putting the income in a different box. Guernsey dividends get aggregated with the UK dividends in the £ 2000 calculation. The annual Broker tax certification form should split them out.

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Re: Investing in Green Infrastructure Funds (ITs)

#265798

Postby daveh » November 20th, 2019, 3:02 pm

Alaric wrote:
richfool wrote: Presumably if I bought any of these Jersey/Guernsey based trusts in my non-sheltered share dealing account, I would have the hassle of declaring them (as an offshore investment) for tax purposes?


There's no withholding tax, so it's just a matter, like REITs, of putting the income in a different box. Guernsey dividends get aggregated with the UK dividends in the £ 2000 calculation. The annual Broker tax certification form should split them out.



But if you don't do a tax return do you have to declare them? I keep all my foreign stuff* in ISA's so I definetley don't have to.


*S32, Irish based ETFs, Channel island registered companies such as Petrofac and TRIG?

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Re: Investing in Green Infrastructure Funds (ITs)

#265801

Postby PinkDalek » November 20th, 2019, 3:12 pm

daveh wrote:But if you don't do a tax return do you have to declare them?


Broadly only if you'd had a Notice to File (which could be in the form of a Tax Return sent to you) or need to inform HMRC that you have tax to pay and they request you fill one in.

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Re: Investing in Green Infrastructure Funds (ITs)

#265894

Postby UncleEbenezer » November 20th, 2019, 11:30 pm

BusyBumbleBee wrote:Not quite sure where the tentacles of Octopus reach - Octopus Energy is highly rated by Which and supplies only renewable energy with some novel tariffs and they are cheaper than most. One wonders if all the output from the companies in the new investment trust will sell their electricity to Octopus Energy. See https://octopus.energy/about-us/ for more info. They do also have their own Solar Farms.


I've heard Octopus Energy spoken of as one of the new "Big Two" suppliers, along with Ovo (who are buying SSE's supply business). I've no idea how closely the supply and generation assets are 'matched' (presumably only on paper - as it all goes through NG), but running both sides of electricity supply does look a bit like the traditional Utilities.

Their tentacles also extend to managing a lot of money in various investment funds with quite a lot focussed on good tax breaks: VCTs, EIS funds, IHT management.

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Re: Investing in Green Infrastructure Funds (ITs)

#266722

Postby PrefInvestor » November 24th, 2019, 11:14 am

Hi All, Seriously thinking about buying some GRP (Greencoat Renewables) the Irish Wind outfor that is just doing a placing. I see that its going to be AIM listed but is priced in Euros (?) which seems odd to me, but anyway. What Im really worried about is whether there will be an withholding or (Irish) CGT tax or other taxes to pay on this investment ?. I had a read of the placing document but it only describes the situation for an Irish resident shareholder, and for them it seems like WHT and CGT were both in play.

Anyone got any information on this then I'd really appreciate it ?.

Thanks

Pref

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Re: Investing in Green Infrastructure Funds (ITs)

#266745

Postby Alaric » November 24th, 2019, 12:48 pm

PrefInvestor wrote:Anyone got any information on this then I'd really appreciate it ?.


The prospectus from 2017
https://www.greencoat-renewables.com/~/ ... cument.pdf
contains
1.3. Dividend Withholding Tax
Withholding tax at the standard rate of income tax (currently 20 per cent.) applies to dividend payments and other profit distributions by an Irish resident company.
Certain categories of shareholders can receive dividends free of dividend withholding tax provided they supplyrelevant declarations to the Company.
The categories of shareholders include:
*an Irish resident company;
*an Irish pension fund or Irish charity approved by the Irish Revenue Commissioners;
*an individual who is neither resident nor ordinarily resident in Ireland and is resident in another EU Member State or in a treaty country;
*a company resident in a treaty country or another Member State that is not controlled by Irish residents;
*a company not resident in Ireland and is under the control, whether directly or indirectly,of a person or persons who, is or are resident in a treaty country or another EU Member State and who is/are not under the control, whether directly or indirectly, of a person whois or persons who are, not so resident;
*a company if its principal class of shares is substantially and regularly traded on a recognised stock exchange in a tax treaty country or Member State;*certain collective investment undertakings;
*certain government agencies and funds as specified by a minister of the Irish Government;and*certain intermediaries.In all cases noted above, the Company must have received from the shareholder, where required, the relevant Irish Revenue Commissioners Dividend Withholding Tax forms (the‘‘DWT Forms’’) prior to the payment of the dividend.


This is saying that a UK resident could get the dividends gross with the necessary paperwork. That might depend whether the nominee Broker is prepared to do the legwork.

There's later material relating to CGT which specifies that it only applies to Irish resident taxpayers.

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Re: Investing in Green Infrastructure Funds (ITs)

#266758

Postby PrefInvestor » November 24th, 2019, 1:27 pm

Alaric wrote:This is saying that a UK resident could get the dividends gross with the necessary paperwork. That might depend whether the nominee Broker is prepared to do the legwork.


Hi Alaric, Thanks for that. I've sent of a question to my broker to ask them to clarify the position.

Of course if anyone else already holds GRP and already knows the answer then that would be a very useful input.

Thanks Again

Pref

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Re: Investing in Green Infrastructure Funds (ITs)

#266782

Postby richfool » November 24th, 2019, 3:17 pm

daveh wrote:
Alaric wrote:
richfool wrote: Presumably if I bought any of these Jersey/Guernsey based trusts in my non-sheltered share dealing account, I would have the hassle of declaring them (as an offshore investment) for tax purposes?


There's no withholding tax, so it's just a matter, like REITs, of putting the income in a different box. Guernsey dividends get aggregated with the UK dividends in the £ 2000 calculation. The annual Broker tax certification form should split them out.



But if you don't do a tax return do you have to declare them? I keep all my foreign stuff* in ISA's so I definetley don't have to.


*S32, Irish based ETFs, Channel island registered companies such as Petrofac and TRIG?

Thank you for picking up and responding to my point.

Most of my holdings are held in a protected ISA and to date that has included Jersey & Guernsey based IT's, REIT's and renewables (all dividends are reinvested). I then hold separately in a non-protected share dealing account a few stocks and a couple of other IT's, the dividends from which are below the £2000 annual dividend income limit. To date I am not required to submit a tax return and I prefer to keep it that way. Thus, whilst I would like to have utilised some spare cash by adding a renewable trust or a gold miner (with an NPV share price) to the share dealing account, I wouldn't want to do so if it then required me to have to start doing a tax return simply to document the dividend income from it (even though there was no tax liability).

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Re: Investing in Green Infrastructure Funds (ITs)

#268331

Postby PrefInvestor » November 30th, 2019, 10:45 pm

Hi All, I have spent some time this week considering two renewable energy investments, see below:-

The first was Greencoat Renewables (ticker GRP) an AIM listed Irish company (priced in euros) that operate wind farms. They were at 1.25 last week but are doing a placing at 1.13 for institutional investors so the price has dropped to 1.15-1.16ish. Still a 12.5% premium (NAV is ~1.03) but much better than it was and personally I’d expect the price to bounce back. Yield is just over 5% BUT there is 20% Irish withholding tax (WHT) to contend with which I won’t be able to reclaim from an ISA. No stamp duty, no FX fee to purchase even though it’s priced in euros (did some dummy trades on HL to test this out) market maker covering that apparently. The WHT is putting me off this one a bit though and I favour the second opportunity.

The second is Octopus Renewable Infrastructure Trust (ticker ORIT) which is trying to raise £250M in an IPO scheduled for next week (w/b 2 Dec) They are part of the same group who run Octopus Energy a well known electricity provider specialising in renewable energy. Sounds like ORIT will do mainly wind and solar. Issue price should be ~100p no stamp duty or commission and pretty well zero premium. Yield about 3% in the first year, targeting 7-8% longer term they say. Full details available at either the LSE or HL in the IPOs area of their web site. Some risks with a new IPO obviously !.

Please DYOR if you are interested in either of these. I have personally decided to take a small holding in ORIT, but then I really like renewables and I see this as an opportunity to get into a renewable energy trust at a zero premium.

ATB

Pref

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Re: Investing in Green Infrastructure Funds (ITs)

#268374

Postby BrummieDave » December 1st, 2019, 1:12 pm

PrefInvestor wrote:Hi All, I have spent some time this week considering two renewable energy investments, see below:-

Please DYOR if you are interested in either of these. I have personally decided to take a small holding in ORIT, but then I really like renewables and I see this as an opportunity to get into a renewable energy trust at a zero premium.

ATB

Pref


I've also been considering investing in ORIT at its IPO stage.

From reading the prospectus the Dividend Policy section states that distributions may take the form of dividend income or "qualifying interest income". If the latter of course, these are treated in the same way as other interest payments for UK tax purposes, so marginal rate (once the "personal savings allowance" has been used) rather than dividend tax rate (again once the "tax free dividend allowance" has been used).

So a bit like REITs with their Property Income Distributions (PID) unless you are holding within a tax exempt wrapper, don't forget to check the net position with regard to tax and the distribution policy of ORIT.

I may therefore wait until April and the new tax year, and see the SP of ORIT at that stage for ISA planning purposes. It will be interesting to see if the initial 3% target yield will suppress the share price around its IPO price, or if it will jump to a premium straight away consistent with the majority in the renewable sector, and the increasing forecast yield above 3%. If I had to guess, I'd go for the latter.

Certainly one to watch.

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Re: Investing in Green Infrastructure Funds (ITs)

#268391

Postby PrefInvestor » December 1st, 2019, 4:19 pm

BrummieDave wrote:From reading the prospectus the Dividend Policy section states that distributions may take the form of dividend income or "qualifying interest income". If the latter of course, these are treated in the same way as other interest payments for UK tax purposes, so marginal rate (once the "personal savings allowance" has been used) rather than dividend tax rate (again once the "tax free dividend allowance" has been used).

So a bit like REITs with their Property Income Distributions (PID) unless you are holding within a tax exempt wrapper, don't forget to check the net position with regard to tax and the distribution policy of ORIT.


Hi brummiedave, Yes I agree that anyone considering investing should consider the tax situation carefully in making thier decision. Personally all of my investment money is completely held within ISAs these days and so the income is not subject to income tax to the best of my knowledge (certainly PIDs on REITs are received without tax in my ISA). But things like withholding taxes and FX charges are things to watch I have found - but only in the case of overseas investments, not applicable to ORIT.

I am hoping that the IPO will be fully subscribed, as to my knowledge pretty well all new share issues on the part of renewable energy trusts in the last year have been. I am not expecting any scaling back as they have said that they are happy to go up to 750M if demand permits. Thereafter I hope that the trust quickly develops the significant premium that all if the other trusts operating in this space seem to have accumulated.

But all that is just my hopes for the investment. As to what actually transpires we will just have to wait and see....

ATB

Pref

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Re: Investing in Green Infrastructure Funds (ITs)

#268470

Postby UncleEbenezer » December 2nd, 2019, 10:21 am

My reading of the prospectus ...

ORIT will start life at 98p NAV. So we pay a small premium.

My reading of the situation ...

It will then be in a market where the underlying assets it needs are much sought-after and don't come cheap, with the obvious risk of overpaying. But also one where more is being built. Without an established asset base, they'll want to invest quite a lot in new assets rather than flood a sellers' market with too much new money all at once. Hence the expectation of a wait for dividends. And new assets are the higher-risk part of any of these funds, so it'll be overweight in risk compared to its peers.

So it may move only gradually to anything like the premium of the sector as a whole - and that assumes no serious mishaps. And of course we can only speculate on the future of that premium when all the politicians are promising much higher inflation.

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Re: Investing in Green Infrastructure Funds (ITs)

#268710

Postby everhopeful » December 3rd, 2019, 9:16 am

HL are offering a 0.5% bonus allocation if the Octopus IT is bought through them. I have subscribed.

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Re: Investing in Green Infrastructure Funds (ITs)

#268867

Postby BusyBumbleBee » December 3rd, 2019, 5:13 pm

UncleEbenezer wrote:My reading of the prospectus ...
ORIT will start life at 98p NAV. So we pay a small premium.

My reading of the situation ...

It will then be in a market where the underlying assets it needs are much sought-after and don't come cheap, with the obvious risk of overpaying. But also one where more is being built. Without an established asset base, they'll want to invest quite a lot in new assets rather than flood a sellers' market with too much new money all at once. Hence the expectation of a wait for dividends. And new assets are the higher-risk part of any of these funds, so it'll be overweight in risk compared to its peers.

So it may move only gradually to anything like the premium of the sector as a whole - and that assumes no serious mishaps. And of course we can only speculate on the future of that premium when all the politicians are promising much higher inflation.

And to add to UncleE's assessment

My experience indicates that the share price will drop at some point during the first year and you will be able to buy into these at a lower price than the 100 pence offer price. And while you are waiting for that to happen you can make more in dividends from another similar share.

For example GORE Street Energy listed (GSF) at 100 pence in June 2018 but I bought into these at 87 pence a share in June this year (albeit missing 3 pence of dividends along the way) : they now stand at 97.5 bid and 100p offer at a slight premium to NAV. And I am sitting o a 12.5% paper profit. I sold Impact Health Care (IHR) at 110 to buy these but could buy those back at 109 today.

I shall hope to do the same with ORIT, but their plans are ambitious in both the number of assets they want to buy and the dividend they target so I may avoid altogether.

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Re: Investing in Green Infrastructure Funds (ITs)

#268908

Postby richfool » December 3rd, 2019, 8:11 pm

BusyBumbleBee wrote:For example GORE Street Energy listed (GSF) at 100 pence in June 2018 but I bought into these at 87 pence a share in June this year (albeit missing 3 pence of dividends along the way) : they now stand at 97.5 bid and 100p offer at a slight premium to NAV. And I am sitting o a 12.5% paper profit. I sold Impact Health Care (IHR) at 110 to buy these but could buy those back at 109 today.

BBB, I've just been having a look at GSF, which I was attracted to because of its involvement with energy storage projects. However, according to HL the yield is (only) 3.00% and its already moved to a premium of 7.81%. (SP: 97.5/100p). So I don't feel particularly enthusiastic about buying it with the dividend yield as low as that. (Noted that you bought in at an earlier point at a discount and with a lower SP).

https://www.hl.co.uk/shares/shares-sear ... nd-plc-ord

Though I have just noticed that Citywire shows the yield as 7.45% (and with a premium of 0.4%):

https://citywire.co.uk/funds_insider/in ... undID=4102

Total assets £45M. Dividends twice yearly.

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Re: Investing in Green Infrastructure Funds (ITs)

#268966

Postby jackdaww » December 4th, 2019, 7:45 am

from AIC site ---

yield is 7.1

premium to nav about 8 .

charges 2.49 - quite a lot ..

:idea:


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