Fund Profile

TRIG - Renewables Infrastructure Group 26 October 2022


Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by TRIG - Renewables Infrastructure Group. 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.

A new version of this profile is available. View Latest

The Renewables Infrastructure Group (TRIG) might be considered the bellwether for the renewable energy infrastructure peer group, having total assets of c. £3.7bn and offering exposure across several geographies and types of renewable technology. Thanks to big changes to the macro picture, there are a number of key questions which investors need to resolve. We examine the influence of three key variables on TRIG’s NAV and returns: power prices, inflation and discount rates.

With regard to power prices, the EU’s price cap of €180/MWh is significantly higher than that assumed in the latest NAV. However, precise details of the UK’s mechanism are yet to be confirmed. If a rumoured cap of £60/MWh were adopted, this would clearly be negative for valuations across the sector. However, it is by no means certain that this is the level that will be arrived at. In the worst case then, there would be a fall in valuations. In a better case scenario, there may be little or no change to valuations.

Interest rate expectations have been rising, as have government bond yields. TRIG’s discount rate of 6.7%, as at 30/06/2022, compares to 20-year UK gilt yields now at 4.5%. This suggests that the implied risk premium relative to UK Gilts is too low and the discount rate should rise, meaning a fall in NAV, all things being equal.

On the other hand, inflation is an important determinant of cashflows and the NAV. Over the next ten years, 51% of TRIG’s revenues are directly linked to inflation, a significant majority being UK assets. It seems fair to expect that inflation will be a tailwind to revenues for TRIG, which will impact earnings positively (see Dividend section), and if it persists longer than currently expected, a buffer against the NAV reducing due to a rise in discount rates.

Analyst's View

Whilst the long-term trajectory of TRIG’s NAV has historically been relatively stable (see Performance section), as we all know past performance is not necessarily a guide to the future. There are many inputs that influence TRIG’s NAV, but rarely have such big changes to assumptions been required over such a short period of time. On the other hand, the picture is nuanced and whilst the short-term picture is changing very rapidly, more extreme conditions are unlikely to persist for the long term.

The coming few months will see more clarity, but as we discuss in the Portfolio section, whilst discount rates are a clear negative, inflation will prove a positive. In the lap of the gods, if we can call it that, is the impact from electricity price caps. The next scheduled NAV date for TRIG will be 31/12/2022, published in mid-February. However, we think it possible that the board will look to provide an updated NAV when the UK government publishes more definitive details on the proposed price cap.

As we discuss in the Discount section, the share price has fallen, reflecting uncertainty but also perhaps anticipating a fall in the NAV. Historically, TRIG has traded on a consistent premium to NAV. The share price fall of 20p over one month, i.e. a fall of c. 14% to 21/10/2022, may prove overdone if the UK government’s price cap is benign. In our view, the diversification and quality of cash flows underpinning the income component of TRIG’s returns continue to make it a useful complement to equity portfolios.


  • A high yield of 5.4%, with the potential for NAV growth from reinvestment of surplus cash
  • Has a pure exposure to diversified assets, technologies and subsidy regimes which are uncorrelated to equity markets, and scores well on ESG matters
  • Inflation link likely to be a positive, counterbalancing rising discount rates


  • Unclear what NAV is, given changing macro picture
  • Specific risk from government legislation, i.e. the proposed renewables’ price cap
  • Dividend cover not as high as that of funds which are not amortising, i.e. paying down debt
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

24 May 2024 Fund Analysis
TRIG’s portfolio continues to evolve, despite equity capital markets being closed…
22 May 2024 Keep It Slightly-unconventional, Stupid
We argue a position in bonds should be diversified with alternatives…
17 Jan 2024 Top of the Pops
We reveal the winners of our investment trust ratings for 2024…
19 Dec 2023 Fund Analysis
TRIG’s shares have dramatically derated over 18 months, yet prospective returns appear more attractive, not less…
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...
09 Aug 2023 Should I stay, or should I go?
Re-appraising the invitation to the bond party…
19 Jul 2023 Fund Analysis
TRIG’s long-term inflation-linkage seems underappreciated by a market fixated on the short term…
13 Apr 2023 Fund Analysis
TRIG’s consistent and inflation-linked returns are underpinned by a high-quality portfolio…
22 Mar 2023 Good vibrations
We identify some sectors with structural discounts we think could close over time…
09 Feb 2023 Here comes the sun
Our analysis suggests renewable energy should be at the core of a well balanced portfolio...
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
20 Dec 2022 Fund Analysis
TRIG’s attractions remain undiminished, yet trade on a discount of 4.5%…
30 Nov 2022 Cry havoc!
Lessons from a year in which an already troubled world was savaged by the dogs of war...
26 Oct 2022 Fund Analysis
We look at TRIG’s key sensitivities to macro factors…
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...
10 Mar 2022 Fund Analysis
TRIG’s managers continue to diversify the portfolio…
09 Mar 2022 Private markets: A closer look at infrastructure and renewables
We examine the £27bn listed Infrastructure and Renewable Energy Infrastructure sectors…
24 Nov 2021 Holding back the tears
While the final text of COP26 fell short of what many had hoped for, the writing is on the wall for fossil fuels and, from an investment perspective, the age of sustainability has only just begun…
14 Jul 2021 Fund Analysis
TRIG is putting ESG considerations at the centre of everything it does…
10 Jun 2021 Green is good!
2021 will see billions dedicated to sustainable initiatives, which brings with it a host of possible investment opportunities...
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…
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…
10 Dec 2020 Fund Analysis
TRIG’s diversified income and strong ESG credentials justify its premium rating…
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?
01 Jul 2020 Fund Analysis
TRIG continues to diversify its portfolio, and has reaffirmed its 2020 dividend target...
09 Oct 2019 Bond proxy?
As a replacement or complement for longer duration bonds, listed alternative income funds look an interesting, well… alternative..
09 Oct 2019 Fund Analysis
Seeks to provide investors with long-term, stable dividends from an increasingly diversified portfolio of renewable energy assets…
22 Mar 2019 Fund Analysis
Seeks to provide investors with long-term, stable dividends whilst preserving the capital value of its investment portfolio...
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…
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 Fund Analysis
The Renewables Infrastructure Group (TRIG) seeks to provide investors with long-term, stable dividends whilst preserving the capital value of its investment portfolio...
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...
View all

Welcome to Kepler Trust Intelligence

Please enter a valid email address
Please enter a valid password
Please enter a valid email address
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
Please enter a company name
Please enter a location name
Please choose an option
Please enter a platform
Please choose an option
Please enter a trust
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
Please select an option
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
Please enter your first name
Please enter your last name
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
Please enter a valid password
Please enter a valid password
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.