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HydrogenOne Capital Growth – Intention to Float

HydrogenOne Capital Growth (HGEN) announced its intention to launch an IPO, with a target raise of £250m via a placing, an offer for subscription and an intermediaries offer of ordinary shares of 1p each in the capital of the company at an issue price of 100p per ordinary share. If successful, HGEN will be the first London-listed investment fund dedicated to clean hydrogen. Some of the other highlights from its proposed launch include:

  • Clean hydrogen has a key role in decarbonisation for the energy transition and improved air quality
  • Specialist investment adviser with strong energy sector track record
  • Targeting a diversified portfolio of hydrogen assets from an investible universe of c.US$90bn, offering distinctive liquid access to private equity, difficult to access elsewhere
  • Strongly orientated to ESG mandates, avoiding GHG emissions in energy and exclusion of fossil fuels producers
  • Distinctive opportunities in risk-diversified hydrogen and related businesses with a target total return of 10-15% per annum
  • Strategic investment by INEOS Energy, committing to a minimum cornerstone investment of £25m

HGEN intends to provide access to clean hydrogen through investment in a diversified portfolio of hydrogen and complementary hydrogen focussed assets in order to deliver capital growth with a strong ESG focus. The company is expected to qualify for the London Stock Exchange’s Green Economy Mark at admission, which recognises companies that derive 50% or more of their total annual revenues from products and services that contribute to the global green economy. HGEN will predominantly invest in private hydrogen assets, and also include hydrogen focussed listed assets from global markets.

HGEN is targeting a NAV total return of 10-15% per annum over the medium to long-term with further upside potential.

The manager, HydrogenOne Capital, is a specialist investor in the clean hydrogen sector, with a focus on unlocking profitable growth for investors within a strong ESG mandate. The announcement notes that the manager’s team are experienced with senior executive track records in Shell, BP, Exxon, Artemis Investment Management and Deutsche Bank.

HGEN expects to publish a prospectus in connection with the Issue shortly and to close the Issue by the end of July 2021.

You can hear JJ Traynor from the management team talking about the hydrogen sector here.

‘Net Zero is driving clean hydrogen delivery globally’

HGEN added the following:

  • In the aftermath of the 2016 Paris Agreement, governments and regions are setting out plans and targets to decarbonise their economies and deliver ‘net zero’ GHG emissions. At the beginning of 2021, over 30 countries have published hydrogen roadmaps, and governments have announced over US$70bn in funding for hydrogen.
  • A 20x increase in clean hydrogen supply is anticipated from 2019 to 2030, and 500x to 2050, as the scale-up of renewable power alongside phase-out of fossil fuels takes effect.
  • Delivering this pathway will require significant and sustained investment and policy support for clean hydrogen and strong growth in the supply chains behind it.  The Investment Adviser believes that clean hydrogen supply could reach in excess of 200 mpta by 2050, representing over US$1 trillion in annual sales by 2040 and potentially US$2.5 trillion in 2050.

‘Hydrogen themes are investible now’

  • There has been a sharp acceleration in clean hydrogen project proposals, with a 60%  increase in announced production capacity in the period to 2030 over last 12 months. These projects are being implemented by some of the world’s largest incumbent users of industrial hydrogen, seeking to decarbonise their feedstocks, and companies investing in growth in clean hydrogen as a low carbon fuel.
  • Over 200 hydrogen projects have now been announced world-wide, with US$300 billion capex potential, with US$80bn in production, construction or in detailed design.
  • The Investment Adviser believes that both green and blue hydrogen project potential are at similar inflection points, with significant growth and positive outlook expected in the hydrogen sector.
  • The Investment Adviser estimates that listed hydrogen clean-tech revenues will see substantial growth, with up to 4 times growth potential from 2021 to 2025, underpinned by electrolyser and fuel cell sales volumes increasing rapidly.

HGEN: HydrogenOne Capital Growth – Intention to Float

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