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Fund Profile


Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Greencoat UK Wind. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Increased clarity on underlying assumptions highlights UKW’s resilient proposition…

Greencoat UK Wind (LON:UKW) owns a diversified portfolio of 47 wind farms operating around the United Kingdom, illustrated in the Portfolio section. It is the largest trust of its type on the London Stock Exchange, with a market capitalisation of £3.4bn, and the shares give investors unhedged exposure to the revenues from the electricity that the wind farms generate, as well as to index-linked subsidies which run long into the future.

UKW’s attractions are not only in the high dividend yield that the shares offer, but also the link to UK inflation (as measured by RPI). During 2022, UK RPI increased by 13.4%, and the board has stated that the company’s revenues allow it to “confidently target a dividend of 8.76 pence per share with respect to 2023”, reflecting an increase in line with this inflation figure. UKW is the only renewable energy infrastructure trust with a long pedigree to continue to directly link dividend targets with inflation.

For the first time, the recent interim results show the managers’ expected dividend cover at different levels of wholesale power prices (see Dividend section). UKW’s fixed revenue base (linked to inflation) means that dividend cover is extremely robust, even in the face of lower power prices. This, in our view, will provide reassurance to investors on both the ability of the trust to continue to pay an attractive dividend, and that UKW will continue to have surplus cash to reinvest, providing good total NAV returns as well.

UKW’s blended asset-level discount rate is now 9%. To get an equivalent discount rate for the equity (or NAV), we must adjust for the structural gearing employed by the trust. On this basis, the discount rate is 11%. Deducting annual costs of c. 1% per annum, this results in an assumed total NAV return over the long term of 10% per annum, if UKW’s long-term assumptions play out.

Kepler View

UKW’s proposition is a relatively simple and attractive one: to invest in wind farms at 9% IRR (the asset-level discount rate as at 30/06/2023), employ modest levels of low-cost debt and pay a dividend linked to inflation, reinvesting any surplus cash flows to grow the NAV. This is exactly what the board and managers have delivered, now for more than ten years.

As we discuss in the Gearing section, UKW has a robust balance sheet, further strengthened by the expectation that UKW will have c. £200m of excess cash flows (after meeting the dividend) per year to reinvest, pay down debt or, in view of the discount at which the shares currently trade, buy shares back. UKW’s managers describe the trust as self-funding, without the need to issue equity. All things being equal, this should have a positive impact on the Discount narrowing.

At the current share price, UKW offers a prospective dividend yield of 6%. Whilst this still offers a c. 200bps premium over the GRY of long-term government bonds, the dividend yield is only half the story. As we discuss in the Portfolio section, with the discount rate having been increased by a further 1% at the time of the interim results, the prospective NAV return of 10% looks attractive on a risk-adjusted basis against many other investment opportunities. The assumptions underpinning the NAV are conservative, and the managers point out that the portfolio has proved robust in the face of downside power price sensitivities, whilst offering upside to power prices, inflation, asset life extension, asset optimisation, new revenue streams, and the interest rate cycle.


  • High dividend yield well covered by cash, and “self-funding”
  • Continued commitment to RPI-linked dividend growth, yet trading on a discount to NAV
  • Uncorrelated assets, and committed pipeline of investments


  • Some fixed-rate gearing will need to be refinanced over the next few years, probably at higher interest rates
  • Gearing exacerbates underlying asset valuation movements
  • Valuations based on long-term assumptions which may (or may not) prove optimistic
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2024 Kepler Alternative Income Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for alternative income... Find out more

Fund History

04 Mar 2024 Greencoat UK Wind: Discounting too much
Wholesale electricity prices are falling, but UKW’s dividend and buyback look secure…
27 Mar 2024 Greencoat UK Wind
Stephen Lilley
Join us for this webinar as part of our month-long online series 'Themes for your ISA in 2024' hosted by the team at Kepler Trust Intelligence throughout March...
calendar Register now
09 Feb 2024 Flash update: Greencoat UK Wind
UKW’s total return strategy continued to bear fruit in 2023…
17 Jan 2024 Top of the Pops
We reveal the winners of our investment trust ratings for 2024…
10 Jan 2024 Definitely maybe
Fund flows and discounts may shed some light on a once-in-a-generation opportunity…
29 Nov 2023 We need to talk about discounts
Discounts are the problem and the solution…
21 Nov 2023 Winds of destiny
Newsflow in the wind sector does nothing to derail the long term attractions of the renewable energy infrastructure sector…
31 Oct 2023 Flash update: Greencoat UK Wind
UKW’s board appears bullish, with an inflation beating dividend and £100m buyback announced…
04 Oct 2023 Get real
The prospect of attractive real returns seems to be ignored by the market…
14 Aug 2023 Fund Analysis
Increased clarity on underlying assumptions highlights UKW’s resilient proposition…
09 Aug 2023 Should I stay, or should I go?
Re-appraising the invitation to the bond party…
27 Jul 2023 Results analysis: Greencoat UK Wind
UKW’s resilient NAV and increased discount rate suggest strong prospective returns…
26 Apr 2023 Hope springs eternal
Far-fetched as it might seem, we imagine some scenarios where a UK government might actually do something useful – and the investment trusts that could benefit…
22 Mar 2023 Good vibrations
We identify some sectors with structural discounts we think could close over time…
30 Mar 2023 Greencoat UK Wind - A unique, sustainable route to income
Stephen Lilley
Rewatch this webinar from our month-long online series 'A feast of ideas for your ISA' hosted by the team at Kepler Trust Intelligence throughout March...
Watch Recording
09 Feb 2023 Here comes the sun
Our analysis suggests renewable energy should be at the core of a well balanced portfolio...
07 Feb 2023 Fund Analysis
UKW’s strong performance isn’t necessarily reflected in the share price…
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
21 Dec 2022 Reasons to be cheerful
We find reasons to be cheery this Christmas in the long-term trends which are going to transform society and generate returns…
21 Sep 2022 Jolly green giant
There could be a solution to economic troubles on the horizon, and one where the UK is a world leader...
11 May 2022 Catch a tiger by the tail
As inflation bites harder than it has for decades, we consider the best ways for investors to hang on to their capital...
29 Apr 2022 Flash update: Greencoat UK Wind
Reporting performance for the first quarter of 2022, UKW has announced a NAV which represents a 13.2% total return for the 3 months to 31/03/2022...
22 Mar 2022 Fund Analysis
UKW is in a strong position to capture the benefit of current high energy prices…
09 Mar 2022 Private markets: A closer look at infrastructure and renewables
We examine the £27bn listed Infrastructure and Renewable Energy Infrastructure sectors…
01 Dec 2021 How to protect your portfolio from inflation
We highlight trusts which could appeal in an environment where 'transient' inflation is here to stay...
03 Nov 2021 Don't fear the reaper
With market direction hard to call, we consider the case for taking a long-term view in the investment trust sector…
10 Jun 2021 Green is good!
2021 will see billions dedicated to sustainable initiatives, which brings with it a host of possible investment opportunities...
02 Jun 2021 Fund Analysis
UKW’s size and robust model means we think it deserves to trade at a premium to peers…
12 May 2021 Riders on the storm
We look at the yields in the alternatives space and how they have been affected by the pandemic…
09 Mar 2021 Fund Analysis
2020 has proved UKW’s resilience, which continues to target an inflation linked dividend…
24 Feb 2021 Dire Straits or Money for Nothing?
With the sector having seen discounts narrow like never before – our analysts debate whether a premium is a price worth paying…
17 Feb 2021 Jungle Fever
Soaring interest in ESG has exciting implications, but risks pushing some stocks to distinctly unsustainable valuations...
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
26 Nov 2020 Fund Analysis
2020 has proved UKW’s resilience, but is now better value in terms of premium...
15 Oct 2020 Nice guys finish first
ESG has moved from hippy pipe-dream to corporate mainstream, but what is it really and where do we see opportunities?
09 Sep 2020 Time to switch horses?
We look at what returns are likely from equity markets in the coming decade and identify which alternatives could offer similar or greater returns for lower levels of risk…
09 Jul 2020 The next big thing: two mega-trends that everyone should own
Tech has beaten almost everything hands down – but nothing lasts forever. Where else should investors be looking for secular growth themes?
23 Apr 2020 Sucker punch
Two of our analysts debate the merits of equity income and alternative income trusts at this point in time...
12 Mar 2020 The importance of buying earners*
Our analysis shows that the impact of dividend contributions on long term returns is anything but trivial...
04 Mar 2020 Fund Analysis
Recent de-rating, but prospects appear undimmed…
16 Oct 2019 Life on Mars: could inflation take us back to the '70s?
We discuss two potential catalysts for inflation - and the assets that could offer a hedge against it...
09 Oct 2019 Bond proxy?
As a replacement or complement for longer duration bonds, listed alternative income funds look an interesting, well… alternative..
19 Sep 2019 Rebels no more...
Climate change and sustainability is now mainstream - we launch ESG analysis into all of our fund research…
19 Sep 2019 Fund Analysis
UKW invests in operating wind farms, aiming to provide an RPI-linked dividend and preserve the real value of the NAV…
06 Mar 2019 Stairway to heaven
Our research shows that reinvesting the income generated by alternative assets could add a significant boost to long-term portfolio performance…
28 Feb 2019 Fund Analysis
Greencoat UK Wind invests in operating wind farms, aiming to provide an RPI-linked dividend and preserve the real value of the NAV...
30 Jan 2019 The Annuity Portfolio
We reveal our investment trust picks for a high income ...
24 Dec 2018 Why did the chicken cross the road?
Because he was so bored of reading newspapers devoted entirely to Brexit he was hoping he’d be hit by a truck.
25 Jul 2018 The Evergreen Annuity Portfolio
Our Evergreen Annuity Portfolio was set up to provide a high income, rising at least in line with inflation...
19 Jul 2018 A new dawn
As the sun sets on fossil fuels, we examine the opportunities for investors in the burgeoning listed renewable infrastructure sector...
26 Mar 2018 Electric dreams
The global shift toward electrification could spark many opportunities…
21 Mar 2018 Fund Analysis
Aims to provide investors with an annual dividend that increases in line with RPI inflation while preserving the real value of the NAV
24 Jan 2018 Seeing the wood for the trees...
Our model portfolio designed as an annuity alternative is struggling to keep pace with inflation, we review the latest from the constituents…
20 Nov 2017 Under pressure
Our model portfolio designed as an annuity alternative is coping so far, but may struggle to keep pace with inflation at this rate…
20 Nov 2017 Fund Analysis
A differentiated trust generating both income and capital growth from operating UK wind farms
25 Jan 2017 Should I stay or should I go?
That's exactly the question we are asking ourselves as the story at BlackRock Income Strategies unfolds...
16 Nov 2016 Weathering well
The Evergreen Annuity Portfolio enters its second year with a solid performance from most of its constituents...
16 Nov 2016 Fund Analysis
An update of the Greencoat UK Wind investment trust including share price performance, discount, dividend, premium, asset allocation and gearing analysis...
13 Oct 2015 The Evergreen Annuity Portfolio
Five 'all season' investments which will produce a sustained high income without eating into capital...
13 Oct 2015 Fund Analysis
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