Fund Profile

TRIG - Renewables Infrastructure Group 22 March 2019

Disclaimer

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.

Overview
A new version of this profile is available. View Latest
Overview

The Renewables Infrastructure Group (TRIG) differentiates itself from its competitors in the listed renewable infrastructure universe in that it aims to provide a diversified exposure to renewable energy assets.

TRIG owns different technologies (wind, solar, battery storage) across several countries (UK, Republic of Ireland, France, Sweden). As a whole, these assets offer long-term cashflows, elements of which are linked to inflation. As has proved to be the case during 2018, the diversification benefits of having a broad portfolio – smoothing cashflows and reducing risks to specific factors – have started to prove themselves.

TRIG is a c.£1.5bn Guernsey-domiciled company, listed on the LSE and a member of the FTSE 250. It has investments in 63 assets in four different regulatory zones, with an aggregate capacity of 1,323MW - enough electricity for the equivalent of around 700,000 UK homes, or 0.6% of the electricity generated in the UK. We understand that this is equivalent to around 550,000 tons of CO2 saved per year.

Currently the company has the majority of its exposure to wind farms, which represents 85% of the portfolio by value when fully built out. Of this, c.5% is invested in wind farms located offshore which the company is now seeking a mandate to increase exposure past the existing 20% limit. At launch, solar made up only 10% of the company’s assets, but now constitutes 14%.

Over 2018 TRIG increased its geographic diversification with investments in the Republic of Ireland, France and Sweden. In January 2017, 17% of TRIG portfolio was invested outside the UK. This had increased to 38% by March 2019. Investing in more assets outside the UK has the benefit of contributing towards the company’s diversification of weather systems, regulations and electricity markets, whilst offering mitigation against localised risks.

TRIG’s dividend has increased each year from launch at an average compound annual rate of 1.8% pa. Each year the board set a dividend target for the following year, payable in four equal installments. The current dividend target is 6.64p per share, equivalent to a yield at the current price of 5.6% and representing an increase of 2.2% from 2018.

In NAV total return terms, the company has performed in-line with the peer group, but is outperforming the FTSE All Share index on a total return basis since launch, with considerably less volatility. Since its initial public offer (to 31st December 2018), the company has delivered NAV total returns of 7.8% per annum. This figure doesn’t include the uplift to NAV from the recent extension of the assumed life of the wind farm assets. In share price terms it has performed better.

The company currently has long-term gearing of approximately 33% of portfolio enterprise value, all of which is all held at the project level. The company does sometimes have additional short-term borrowings at the fund level under its Revolving Acquisition Facility (RAF), currently £222m drawn. TRIG’s fund-raising to repay the RAF is in progress which, along with the proceeds from a refinancing of some project investments is intended to repay the RAF. Assuming this is successful, overall gearing is estimated to be c. 35% of portfolio enterprise value, which is at the low end of the peer group. The longer-term debt is amortised over the life of each asset’s specific subsidy regime, which de-risks these assets over time.

TRIG has two managers who work together to achieve the company’s aims: InfraRed Capital Partners, which is responsible for the financial management, sourcing and executing of new investments; and Renewable Energy Systems (RES), which has a dedicated team of more than 40 providing portfolio-level operations management.

The company has enjoyed robust demand for its shares, and according to data from Numis has traded on an average premium to NAV over the last year of 4.4%. At the current premium of c 5%, the shares trade at a discount to the sector average premium of c 9%.

Continue to Portfolio

Fund History

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

Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority.
Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority. 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
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a trust
{{item.msg}}
?
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
{{item.msg}}
Please select an option
{{item.msg}}
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
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
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.