Investment trust insider on Downing Renewables – Another potential investment company launch emerged this past week as Downing Renewables & Infrastructure Trust (DORE) published an intention to float announcement and followed up with its prospectus today.
It joins an increasingly crowded field – there are already 14 funds in the AIC’s Renewable Energy Infrastructure sector. However, each of these trades at a premium to asset value and none seems to have much problem raising money. There is probably room for one more.
DORE is looking to raise £200m. To make it across the line, its fund managers will have to convince investors that they have the requisite experience and a decent track record. It is also increasingly important to have a pipeline of potential investments lined up – so that the company can hit the ground running and start to generate income as soon as possible.
Tom Williams is head of energy and infrastructure at Downing. He has over 20 years’ experience of private equity and debt investments. The team is extensive, with 27 investment and asset management personnel supported by around 90 operations staff. The Downing approach is to be quite hands on with their investments and handle a fair bit of work in-house that other managers would outsource to consultants. They have made around 100 investments over the past decade and have generated returns of about 9% a year on these.
DORE will invest in a range of renewable generation sectors: solar, wind, hydro and geothermal. In terms of diversification, it will then match a listed fund such as The Renewables Infrastructure Group (TRIG) but will lag JLEN Environmental Assets (JLEN), which has the broadest spread of revenue-generating investments, including a successful anaerobic digestion portfolio and water and waste plants.
Mixing solar, wind and hydro in the same portfolio reduces the risk… read more here