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.

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Greencoat UK Wind (LON:UKW) has had a very strong year of operating performance, highlighted by the recent NAV and dividend announcement for 31/12/2022. Underpinning UKW’s success last year has been its ability to operate without hedging electricity exposure. This is a function of the basic model with which it was launched ten years ago, in which the majority of assets are purchased unlevered, allowing the trust itself the option to gear up, but also to budget for high free cashflow and a dividend cover of c. 1.7x in a standard year.

As a result of high wholesale electricity prices, but also of inflation contributing to revenues derived from inflation-linked subsidies, UKW has announced dividend cover of 3.2x for 2022. This will allow a significant reinvestment of surplus cash (see Portfolio section), thereby boosting the chances that the board will be able to maintain the trust’s sector-leading dividend growth, which has so far been pegged to UK RPI each year since launch. At the target dividend of 8.76p for 2023, the shares offer a prospective yield of 5.4%.

The blended portfolio discount rate (applied to each asset’s underlying cashflows) now stands at 8%, the same rate used to value UKW’s assets at launch ten years ago. The recent NAV announcement highlighted that on an NAV basis (i.e. regarding the geared cashflows available to the trust and the way most peers’ discount rates are reported) the discount rate is c. 10%. Taking off costs of c. 1% per annum, this results in an expected (not guaranteed) NAV total return for shareholders of 9% per annum, assuming UKW’s assumptions play out.

Analyst's View

UKW’s managers comment that last year, they “fixed the roof whilst the sun was shining”. By this they mean that firstly, when electricity prices were rising at their fastest rate, they built plenty of conservatism into the NAV by assuming very significant haircuts to the wholesale electricity prices at which they would sell their energy output. Secondly, as interest rates started to increase, they raised the discount rate at which they value assets.

Having captured high prices during the last year, but having seen electricity prices come back significantly from their highs, UKW’s conservative approach looks to have paid off, given the NAV increased by 12.4p over Q4 (and 33.6p for the 12 months). We calculate that UKW’s NAV total return over 2022 was 30.95%. This strong performance is impressive, but in our view is even more so given the conservatism still baked into the NAV – especially with regard to inflation. We note the equity discount rate, after charges, would translate into a long-term NAV total return of 9%.

Perhaps of more immediate interest is the fact that the dividend has yet again been raised – this time by 13.4% – in line with UK RPI for December. As we illustrate in the Dividend section, dividend cover for 2022 was 3.2x, meaning surplus cash of £394m (by Kepler’s estimate) can be reinvested, which we believe further boosts the chances of UKW increasing future dividends in line with inflation. The current modest discount to NAV may in time prove an attractive entry point, given the historical premium that the shares have attracted.


  • High dividend yield well covered by cash
  • 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
Continue to Portfolio
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

10 Jun 2024 Investing in renewable infrastructure with UKW manager, Stephen Lilley – Podcast: Trust Issues #32
We discuss opportunities for investors in the renewable energy infrastructure sector with Greencoat UK Wind manager Stephen Lilley...
22 May 2024 Keep It Slightly-unconventional, Stupid
We argue a position in bonds should be diversified with alternatives…
01 May 2024 Flash Update: Greencoat UK Wind
UKW’s first quarter update shows the trust is well-placed for continued growth…
28 Mar 2024 Healthcare, UK valuations, and renewables
We take a look back at the final week of our ISA event…
20 Mar 2024 How to grow old gracefully (and preferably rich)...
Ahead of the final week of our event, focused on retirement planning, we consider some of the complexities of portfolio construction…
20 Mar 2024 Fund Analysis
Chunky dividend cover is the key to UKW’s resilient proposition…
22 Feb 2024 Investing in renewable energy infrastructure with investment trusts
Closed-ended are a simple way to access the attractive income and defensive potential of renewables infrastructure…
27 Mar 2024 Greencoat UK Wind
Stephen Lilley
Rewatch 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...
Watch Recording
09 Feb 2024 Flash update: Greencoat UK Wind
UKW’s total return strategy continued to bear fruit in 2023…
23 Jan 2024 Staying the course
UKW may have a new co-manager in 2024 but the trust’s attractive qualities remain the same…
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
Viewing investment trust discounts as a problem ignores the crucial role they play in keeping the sector on an even keel...
14 Nov 2023 Paid to wait
UKW’s discount may tighten if it continues to deliver strong total returns…
31 Oct 2023 Flash update: Greencoat UK Wind
UKW’s board appears bullish, with an inflation beating dividend and £100m buyback announced…
27 Oct 2023 What else?
Some trusts still offer attractive return potential, without the high valuations the US offers...
15 Sep 2023 Pizza Tiger
You don’t need to reinvent the wheel to deliver good returns on your investment...
08 Sep 2023 Plotting a soft landing
Alternatives have taken a beating over the past two years. We may not be through the shoals yet but some trusts offer both upside potential and downside protection…
08 Sep 2023 Heads you win, tails you wind
UKW offers strong upside potential, regardless of what the economic outlook is…
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?
As discounts reach historically narrow levels across the board – 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 seems to beat every other sector hands down – in both up and down markets – 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 - so we are adding 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…
19 Mar 2019 Electric Dreams: The future of energy
At our first public event, three fund managers gave their insights on the future of energy and the investment opportunities in this space...
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...
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.
15 Aug 2018 The income edge
Last year saw investment trusts soar in popularity among both retail investors and wealth managers. We examine why this has happened, as well as the structural advantages of investment trusts for income-hungry investors...
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...
04 Apr 2018 Electric dreams
We examine the growing shift toward electrical power across a broad range of industries, and the implications for investment trusts with exposure to them...
04 Apr 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
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