Guinness Asset Management has launched the Guinness Renewable Energy EIS Fund, which will invest in renewable energy companies in the UK that qualify for Feed-in Tariffs.
The Guinness Renewable Energy EIS Fund has been established to give Investors access to a new type of investment opportunity that combines tax reliefs available under the Enterprise Investment Scheme (EIS) with the attractive Feed-in Tariffs (FiTs) that were introduced on 1 April 2010 for certain renewable energy projects.
The Fund will invest in solar PV, wind and hydro electricity generating projects, allowing it to build a diversified portfolio while spreading technology, regulatory and meteorological risks. As well as mitigating risk, investing across the technologies allows the investment manager to look for the best returns for investors.
Investments will have predictable revenues with inflation-linked pricing over 20 to 25 years. There is a guaranteed demand and price for the electricity generated under the Feed-in Tariff regime.
By combining Feed-in Tariff investments with EIS tax relief, and through judicious selection of investments, the Investment Manager is targeting a net return of 10% to 12% per annum for Qualifying Investors.
In an innovation for EIS Funds, the Investment Manager will only receive performance fees once a 5% per annum preferred return hurdle has been met.
The fund will be managed by Shane Gallwey, Tom Hill-Norton and Edward Guinness who bring extensive EIS, private equity and renewable energy experience.They are supported by Matthew Page, and an Investment Committee that includes Tim Guinness, Andrew Martin Smith and Howard Flight.
“Renewable energy companies that generate electricity under the Feed-in Tariff regime have great visibility of revenues," says Gallwey. "Combining this with the tax benefits available to EIS qualifying companies enhances an already excellent investment opportunity. We have a first rate team identifying suitable companies for investment.”
