The Octopus Group will float a new renewables fund, the Octopus Renewables Infrastructure Trust, on the London Stock Exchange.
It is aiming to raise £250 million on the Main Market of the London Stock Exchange to finance investments into renewables.
Solar PV will be one of the recipients of the funds raised, with the company looking to invest in a “geographically and technologically diversified” range of renewable energy assets across Europe and Australia, including the UK.
Onshore wind is also on its radar, as well as other generation and non-generation renewable energy related assets, it said, with a mix of already operating, in construction and consruction-ready assets set to see investment.
It's expected that in the long term, investments in the UK will represent less than 50% of Gross Asset Value and investment in solar PV will not exceed 60% Gross Asset Value. The same is also expected of onshore wind, and investments in any single country other than the UK are expected to represent no more than 40%.
A pipeline of approximately £2.8 billion of renewable energy assets has been identified by Octopus Renewables, the Octopus Group’s renewables investment manager.
The fund is planning to raise the funds through a placing, an offer for subscription and an intermediaries offer of Ordinary Shares. It is targeting a net total shareholder return of between 7% and 8% per year over the medium to long term, with a dividend yield of 3% by reference to the Issue Price during the first year, with the fund set to float in December. This rises to 5% in financial year 2021 and progressive thereafter, with dividends paid quarterly.
The last few months have seen a flurry of activity from clean energy funds. Foresight Solar Fund announced a new placing of Ordinary Shares in October, a month that also saw storage fund Gresham House raise £41.6 million through a new share placing.
Philip Austin, chairman of Octopus Renewables Infrastructure Trust, said the new fund offers investors an opportunity to invest in a “diverse” portfolio, accompanied by “attractive and sustainable dividends, with an element of capital growth”.
It is the latest edition to the Octopus Group, which includes Octopus Energy. The supplier this month announced the launch of Co-op Community Energy in collaboration with Midcounties Co-operative. This came after the announcement of a strategic partnership between the two companies in August, which saw Octopus acquire 300,000 energy retail customers from Co-op Energy.