Investment trust insider on Blackfinch Renewable European Income – James Carthew: How to stand out in crowded renewables
After a summer lull, the investment company fundraising machine has roared back into life in recent weeks. Many decent existing funds that have already proved themselves are looking for more cash. For example, just in the last few days, we have seen an oversubscribed issue from Target Healthcare REIT (THRL) and a substantial fundraise by Aquila European Renewables Income (AERI).
There is also an interesting clutch of new trusts to consider, including a new forestry fund – Foresight Sustainable Forestry – and Responsible Housing Reit, a new BMO-managed competitor to Civitas Social Housing (CSH), Triple Point Social Housing Reit (SOHO) and, to a lesser extent, Home Reit (HOME). This week though, I will focus on Blackfinch Renewable European Income Trust (BRET).
Blackfinch is looking for £300m to invest in a portfolio of renewable energy assets. BRET has a £232m seed portfolio lined up and thinks it can generate dividend yields (based on the issue price) of 1%-3% for its first financial year to 30 June 2022, 5% to 5.5% for the second financial year, 6% in year three, and progressive dividend growth thereafter.
It is looking to enter a crowded market. Many of the 19 existing constituents of the Association of Investment Companies’ Renewable Energy Infrastructure sector are themselves recent new issues and quite a few of them are trying to expand….
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