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Investment trust launches could shake up their fledgling asset classes

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First post-Covid-19 investment trust launches could shake up their fledgling asset classes

David Brenchley, Investment Week
28 August 2020

 

Triple Point to IPO energy efficiency trust

The post-Covid-19 investment trust IPO market is set to come alive, with competition for two current ‘sole players’ set to shake up their respective sectors.

Triple Point Investment Management confirmed on Tuesday (25 August) that it was seeking to list a closed-ended fund investing in energy efficiency assets.

The firm said it was looking to raise £200m for the Triple Point Energy Efficiency Infrastructure, with the aim to have shares trading on the London Stock Exchange by 19 October.

Impact investor Triple Point said it has over ten years’ of experience in energy efficiency and decentralised energy generation project investing.

The fund, it added, would invest in a diversified portfolio of energy efficiency assets, which have a positive environmental impact and that facilitate the transition to a low-carbon economy.

It will focus on three areas specifically: low carbon distribution, such as CHP and heat networks; social housing retrofit and industrial energy efficiency including energy efficiency as a service; and distributed generation, such as hydro and solar.

With a near-term pipeline worth around £293m already identified, Triple Point said the fund would offer shareholders exposure to inflation-linked, long-term contracts with high-quality industrial, corporate and government counterparties. It has a longer-term pipeline worth around £675m.

The fund will target a total return of between 7% and 8% per annum, with a target dividend yield of 5% in its first financial year, seeking to adopt a progressive dividend policy thereafter.

…QuotedData’s James Carthew pointed out that while SDCL yields lower than Triple Point’s target, at 4.9%, had the trust not been trading on such a chunky premium, it would be higher.

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