Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to 87investor,longview,Sussexlad,niord,staffordian, for Donating to support the site

Investing in Green Infrastructure Funds (ITs)

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
mc2fool
Lemon Quarter
Posts: 2154
Joined: November 4th, 2016, 11:24 am
Has thanked: 5 times
Been thanked: 622 times

Re: Investing in Green Infrastructure Funds (ITs)

#339559

Postby mc2fool » September 10th, 2020, 8:32 pm

ReallyVeryFoolish wrote:
Spet0789 wrote:
ReallyVeryFoolish wrote:No. Instead, I would subscribe to the Energy Efficiency Investment Trust I posted about yesterday in share ideas. I won't buy at a premium, especially one as wide as you quoted above.

RVF


The Greencoat UK Wind NAV is calculated based on a fixed set of assumptions, of which the most notable is a 7.5% IRR on the future cashflows. There is no price for the underlying assets. The current share price equates to a discount rate of around 6%.

So in buying this IT at this market price, the question to ask yourself is whether you are happy to buy these cashflows (with their various risks) at a yield of 6%.

Ah, I see. Very misleading then to quote NAV in a conventional manner.

So how do you value them then? (Genuine question.)

Dod101
Lemon Half
Posts: 6326
Joined: October 10th, 2017, 11:33 am
Has thanked: 1436 times
Been thanked: 2522 times

Re: Investing in Green Infrastructure Funds (ITs)

#339563

Postby Dod101 » September 10th, 2020, 10:03 pm

But that is just a mechanism for valuing the assets in the same way that British Land values its buildings on the rental flow discounted into the future. OTOH a building has a value in other ways in that for instance you could convert an office block into flats and thereby change the valuation. You cannot very well do that with wind turbine 30 miles offshore but the principle is the same. Wind turbines do not have an indefinite future of course so I suppose they use the discounted cash flow over the estimated lifetime.

The NAV ought though to give an indication of the value at which the asset will change hands and thus give some indication of the share price in relation to the NAV and thus the yield.

Surely a lot of muddled thinking here where there is no need for it.

Dod

dredd0
Posts: 25
Joined: November 6th, 2016, 8:49 pm
Has thanked: 7 times
Been thanked: 1 time

Re: Investing in Green Infrastructure Funds (ITs)

#339779

Postby dredd0 » September 11th, 2020, 9:34 pm

For me it is a way of getting exposure to UK wind generation without trying to be too clever. It's not like an Investment Company NAV where you might be able to buy the underlying assets cheaper. So far the manager has not started to diversify overseas and gearing is conservative. So long as that continues I will keep investing. One thing I can be sure of is the wind will continue to blow.

sunnyjoe
2 Lemon pips
Posts: 218
Joined: November 4th, 2016, 1:11 pm
Has thanked: 808 times
Been thanked: 93 times

Re: Investing in Green Infrastructure Funds (ITs)

#340565

Postby sunnyjoe » September 16th, 2020, 9:39 am

https://renews.biz/63140/octopus-renewa ... over-341m/

Octopus Renewables Infrastructure Trust reported net assets worth over £341m (€370m) in its maiden unaudited interim results for the period from incorporation on 11 October 2019 to 30 June 2020...

UncleEbenezer
Lemon Half
Posts: 5180
Joined: November 4th, 2016, 8:17 pm
Has thanked: 658 times
Been thanked: 1034 times

Re: Investing in Green Infrastructure Funds (ITs)

#340632

Postby UncleEbenezer » September 16th, 2020, 1:10 pm

sunnyjoe wrote:https://renews.biz/63140/octopus-renewables-assets-valued-at-over-341m/

Octopus Renewables Infrastructure Trust reported net assets worth over £341m (€370m) in its maiden unaudited interim results for the period from incorporation on 11 October 2019 to 30 June 2020...

Thanks for posting. They're clearly not sitting on their hands!

So, a mix of new projects (great - rosy picture of all on track) and operational assets (at what price in today's market?). Which is what we subscribed to.

ReallyVeryFoolish
Lemon Slice
Posts: 864
Joined: October 5th, 2019, 12:06 pm
Has thanked: 632 times
Been thanked: 388 times

Re: Investing in Green Infrastructure Funds (ITs)

#340636

Postby ReallyVeryFoolish » September 16th, 2020, 1:20 pm

Having been pondering investments in this area, I have been weighing all the options I can find. I don't like the premia on all these investments at all. I have been looking for a GBP ETF as a way into a broad selection of investments in the industry, but failed to find one listed in GBP so far.

I have been looking this morning at a fund of renewable energy funds as a possible managed investment option in this area. Yes, I already know funds of funds are not the cheapest option. Yes I already know this isn't an investment trust. And yes I know such vehicles are often talked down here. And yes I know I am late to this party.

But I am looking seriously for an investment with a degree of diversification and a professional management that buying one investment trust or one energy company doesn't really provide. I am OK in principle paying for that -

https://www.graviscapital.com/funds/gra ... ergy/about

RVF

sunnyjoe
2 Lemon pips
Posts: 218
Joined: November 4th, 2016, 1:11 pm
Has thanked: 808 times
Been thanked: 93 times

Re: Investing in Green Infrastructure Funds (ITs)

#340658

Postby sunnyjoe » September 16th, 2020, 2:26 pm

ReallyVeryFoolish wrote:Having been pondering investments in this area, I have been weighing all the options I can find. I don't like the premia on all these investments at all. I have been looking for a GBP ETF as a way into a broad selection of investments in the industry, but failed to find one listed in GBP so far.

I have been looking this morning at a fund of renewable energy funds as a possible managed investment option in this area. Yes, I already know funds of funds are not the cheapest option. Yes I already know this isn't an investment trust. And yes I know such vehicles are often talked down here. And yes I know I am late to this party.

But I am looking seriously for an investment with a degree of diversification and a professional management that buying one investment trust or one energy company doesn't really provide. I am OK in principle paying for that -

https://www.graviscapital.com/funds/gra ... ergy/about

RVF


Gravis seems to be investing in all those investments which are priced at a premium to asset value. I don't see the point. All of those individual investments are already diversified across a number of assets if not a number of technologies and countries too
https://www.graviscapital.com/funds/gra ... /portfolio

ReallyVeryFoolish
Lemon Slice
Posts: 864
Joined: October 5th, 2019, 12:06 pm
Has thanked: 632 times
Been thanked: 388 times

Re: Investing in Green Infrastructure Funds (ITs)

#340667

Postby ReallyVeryFoolish » September 16th, 2020, 3:11 pm

sunnyjoe wrote:
ReallyVeryFoolish wrote:Having been pondering investments in this area, I have been weighing all the options I can find. I don't like the premia on all these investments at all. I have been looking for a GBP ETF as a way into a broad selection of investments in the industry, but failed to find one listed in GBP so far.

I have been looking this morning at a fund of renewable energy funds as a possible managed investment option in this area. Yes, I already know funds of funds are not the cheapest option. Yes I already know this isn't an investment trust. And yes I know such vehicles are often talked down here. And yes I know I am late to this party.

But I am looking seriously for an investment with a degree of diversification and a professional management that buying one investment trust or one energy company doesn't really provide. I am OK in principle paying for that -

https://www.graviscapital.com/funds/gra ... ergy/about

RVF


Gravis seems to be investing in all those investments which are priced at a premium to asset value. I don't see the point. All of those individual investments are already diversified across a number of assets if not a number of technologies and countries too
https://www.graviscapital.com/funds/gra ... /portfolio

Indeed, that's what I am wondering. The question therefore is whether the extra diversity and the portfolio management is worth paying for. I am thinking on balance, in a fairly immature market, that perhaps it is worth it. But again, perhaps the management will do a rubbish job.

RVF

dspp
Lemon Half
Posts: 5794
Joined: November 4th, 2016, 10:53 am
Has thanked: 4806 times
Been thanked: 1664 times

Re: Investing in Green Infrastructure Funds (ITs)

#340675

Postby dspp » September 16th, 2020, 3:47 pm

ReallyVeryFoolish wrote:Indeed, that's what I am wondering. The question therefore is whether the extra diversity and the portfolio management is worth paying for. I am thinking on balance, in a fairly immature market, that perhaps it is worth it. But again, perhaps the management will do a rubbish job.

RVF


When I listened to yesterday's starter pitch on the BP webcast my brain hit a "does not compute" moment. They were saying that they were going to do all this renewables stuff bigger/faster/cheaper/lighter/more-profitably because they were BP and had unique capabilities in project management and etc.

Translated that told me that BP either think that the existing renewables industry is stupid & useless, or that BP doesn't think that but thinks it can say that so as to justify BP's investments. Either way to my mind is plain wrong, as existing renewables projects/technology are in the main very well done, and ordinarily are being executed at an appropriate scale and in a well thought-out pipeline. I am still struggling to see what additional value BP will bring to the party, and as a BP shareholder (at the moment) that worries me. Ditto for Shell by the way. As my GF said to me, maybe I should be entering into a phase of "managed decline" of my investments in BP and Shell.

I have the same problem with this lot - is it really an immature market any longer ? Surely not. If not, where is the extra value really coming from, or is it not of value ?

regards, dspp

ReallyVeryFoolish
Lemon Slice
Posts: 864
Joined: October 5th, 2019, 12:06 pm
Has thanked: 632 times
Been thanked: 388 times

Re: Investing in Green Infrastructure Funds (ITs)

#340678

Postby ReallyVeryFoolish » September 16th, 2020, 4:22 pm

dspp wrote:
ReallyVeryFoolish wrote:Indeed, that's what I am wondering. The question therefore is whether the extra diversity and the portfolio management is worth paying for. I am thinking on balance, in a fairly immature market, that perhaps it is worth it. But again, perhaps the management will do a rubbish job.

RVF


When I listened to yesterday's starter pitch on the BP webcast my brain hit a "does not compute" moment. They were saying that they were going to do all this renewables stuff bigger/faster/cheaper/lighter/more-profitably because they were BP and had unique capabilities in project management and etc.

Translated that told me that BP either think that the existing renewables industry is stupid & useless, or that BP doesn't think that but thinks it can say that so as to justify BP's investments. Either way to my mind is plain wrong, as existing renewables projects/technology are in the main very well done, and ordinarily are being executed at an appropriate scale and in a well thought-out pipeline. I am still struggling to see what additional value BP will bring to the party, and as a BP shareholder (at the moment) that worries me. Ditto for Shell by the way. As my GF said to me, maybe I should be entering into a phase of "managed decline" of my investments in BP and Shell.

I have the same problem with this lot - is it really an immature market any longer ? Surely not. If not, where is the extra value really coming from, or is it not of value ?

regards, dspp

My thoughts on BP are on record. I have much more faith in Shell. However, to respond to a couple of your points, dspp - Globally, yes I think it is an immature market still. The extra value will be realised as dominant global players emerge amongst the operating and distribution companies. Many countries with massive renewables potential have hardly scratched the renewables surface. (Australia, I am looking at you). Granted, in wind turbine manufacturing we already have dominant vendors. Solar PV manufacturing is commoditised. But the extra value in new energy industries will come in the industry from a combination consolidation/scale and organic growth. As with many things today, the future growth, innovation and value is beyond these islands and indeed beyond Western Europe. Globally dominant new energy companies are yet to emerge. I think Shell will be one of them.

RVF

TUK020
Lemon Quarter
Posts: 1079
Joined: November 5th, 2016, 7:41 am
Has thanked: 280 times
Been thanked: 611 times

Re: Investing in Green Infrastructure Funds (ITs)

#340691

Postby TUK020 » September 16th, 2020, 5:15 pm

dspp wrote:
ReallyVeryFoolish wrote:Indeed, that's what I am wondering. The question therefore is whether the extra diversity and the portfolio management is worth paying for. I am thinking on balance, in a fairly immature market, that perhaps it is worth it. But again, perhaps the management will do a rubbish job.

RVF


When I listened to yesterday's starter pitch on the BP webcast my brain hit a "does not compute" moment. They were saying that they were going to do all this renewables stuff bigger/faster/cheaper/lighter/more-profitably because they were BP and had unique capabilities in project management and etc.

Translated that told me that BP either think that the existing renewables industry is stupid & useless, or that BP doesn't think that but thinks it can say that so as to justify BP's investments. Either way to my mind is plain wrong, as existing renewables projects/technology are in the main very well done, and ordinarily are being executed at an appropriate scale and in a well thought-out pipeline. I am still struggling to see what additional value BP will bring to the party, and as a BP shareholder (at the moment) that worries me. Ditto for Shell by the way. As my GF said to me, maybe I should be entering into a phase of "managed decline" of my investments in BP and Shell.

I have the same problem with this lot - is it really an immature market any longer ? Surely not. If not, where is the extra value really coming from, or is it not of value ?

regards, dspp


I think this market is indeed immature in that:
a) opportunity is for the renewables to scale massively
b) industry structure is not that embedded yet.

The one technology that seems to be getting competitive at scale on generation is off shore wind.

BP (or Shell) could decide that they have the offshore engineering skills, large project management, big ticket financing to really start making some vertical integration in this arena.
Think the scale in terms of buying VESTAS, buying up most of the North Sea wind operating licenses, taking a stake in NG, + doing the equivalent in Belgium, Netherlands etc

All of the above is just off the top of my head, and I am not saying that these particulars are feasible/sensible, but both BP (avowed sea change in direction under Looney) and Shell have the means to shake things up in a major way

funduffer
Lemon Slice
Posts: 499
Joined: November 4th, 2016, 12:11 pm
Has thanked: 42 times
Been thanked: 246 times

Re: Investing in Green Infrastructure Funds (ITs)

#340703

Postby funduffer » September 16th, 2020, 5:52 pm

This is a most interesting thread, and I have learned a lot trawling through all 16 pages of it.

I have understood better how NAV is estimated for these IT’s, with the key risks being electricity prices, wind characteristics and asset longevity.

Looking at the aic website for this sector, all the IT’s are at a premium to NAV, up to an eye-watering 25%. I guess that this is because the market considers these NAV estimates to be conservative?

I have just purchased a small stake in UKW, but even this is at a premium of 12%.

I want a solar IT to complement wind, and am looking at NextEnergy solar (NESF), which is at a much lower premium of just 4%.

Would a solar company assess NAV any differently to a wind company?

Anyway, thanks for all the contributions on this thread.

FD


Return to “Investment Strategies”

Who is online

Users browsing this forum: No registered users and 7 guests