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QuotedData’s morning briefing 1 March 2021

SDCL Energy acquires 50% stake in US energy portfolio for $110m

In QuotedData’s morning briefing 1 March 2021 –

  • SDCL Energy Efficiency Income (SEIT) noted that further to its announcement on 24 December 2020, it has completed the acquisition of a series of portfolios of commercial and industrial on-site solar and energy storage projects in the United States, together with a 50% interest in the platform that has created them, Onyx Renewable Partners from funds managed by Blackstone. The upfront initial consideration is US$120m with an incremental US$30m expected to be deployed in the coming months as construction progresses on solar projects. SEIT expects the US$150m investment to scale up over time as it continues the build-out of Onyx’s on-site solar pipeline. The projects being acquired include a 100% interest in four solar and storage portfolios totalling over 175 MW of operational, in-construction and development-stage assets, which provide renewable energy generated on-site directly to the end-user and a 50% interest in Onyx and its longer-term pipeline, which is projected to exceed 500MW over the next 5 years.
  • HICL Infrastructure (HICL) announced that it has entered into an agreement to divest its entire equity and subordinated debt interests in the South East London Police Stations PPP project. The consideration is circa £27m and the disposal is expected to complete during Q1 2021.
  • Herald (HRI) announced that for personal reasons and with immediate effect Ian Russell has resigned from its Board. Ian has been a director since 2018 and chair of the board since 2019. With immediate effect, Tom Black, who is the senior independent director and who has been a director since 2013, will succeed Ian as chair of the board.
  • FastForward Innovations (FFWD) announced that it has invested approximately £17,215 as part of an oversubscribed £13m placing by Cellular Goods. Cellular Goods is a UK-based provider of premium consumer products based on biosynthetic cannabinoids with an initial focus on two product verticals: premium skincare and topical athletic recovery products to be launched from this autumn.
  • Ruffer released its half-year report to 31 December 2020. The 2020 calendar year share price return of 17.8%, and NAV return of 13.5%, contributed to a compound annual NAV return of 7.5% since the company listed in 2004, compared to 6.8% per annum from the FTSE all-share total return index. Looking forward, the manager made note of the following key takeaways in the outlook section:
    • COVID-19 as the Great Accelerator – many existing trends have been amplified. Of these, the greatest threat to investors is the necessity of financial repression to pay for past debts.

    • The negative bond/equity correlation trade may be over – conventional portfolios are riskier than they appear through back-testing scenarios.

    • Expect the unexpected – a genuinely all-weather portfolio is going to be essential.

    • Beware the duration trade – many different assets have benefited from falling bond yields. A mix of cyclical equities and interest rate options gives you a genuine diversifier.

  • Urban Logistics REIT has acquired a 57,494 sq ft distribution asset in Droitwich for £5.4m at a 4.95% net initial yield. The site is let to Spire Healthcare on a reversionary lease that will see rent increase to £5.46 per sq ft from 7 April 2021, which increases the property yield to 5.51%.
  • UK Commercial Property REIT has sold the single-let office Hartshead House, in Sheffield, to Arella Property Holding for £17m reflecting its December book valuation. The group said the proceeds would be spent on acquisitions in property sectors supported by “long-term structural drivers of the modern economy, including the continued rise of e-commerce and urbanisation, and which are expected to deliver resilient rental income”.

We also have a heads of terms merger agreement between City Merchants High Yield and Invesco Enhanced Income, annual results from BB Healthcare and Greencoat Renewables, and a portfolio update from NextEnergy Solar.

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