A popular listed investment vehicle specialising in backing energy efficiency projects is raising another £100 million from investors in a deal expected to boost its size to well over £1.2 billion.
SDCL Energy Efficiency Income Trust is aiming to tap small investors with a retail offer alongside the main placing for City institutions.
It is the ninth fundraising by SEEIT since its launch in 2018 as investors buy into its sales pitch that green projects, from solar farms to stored energy plants, can produce a strong yield and protection from inflation while helping to slow climate change.
The FTSE 250 company said that the cash raised would be used for follow-on investments in existing projects and to back potential new ventures, including electric vehicle charging stations and biogas and geothermal generating projects. It said it had identified £400 million of potential new investments.
The new shares would be priced in the 113p to 117p range, it said, with the final price set on Tuesday after a book-building process. That compares with the most recent net asset value per share figure of 108.4p on March 31.
Its shares fell by 4p, or 3.4 per cent, to 114p after the announcement yesterday.
The group raised £100 million from investors at 115p as recently as March and in September 2021 it raised £250 million after setting its original target at £175 million. It said it would accept as much as £150 million in the present fundraising, if demand was strong enough.
Existing retail investors will be able to take part in the fundraising via Peel Hunt’s REX system. Platforms including Hargreaves Lansdown, AJ Bell and Interactive Investor have signed up to participate.
The fund manager is aiming to pay a total dividend of 6p this year.
Jonathan Maxwell, SDCL’s founder and chief executive, said the fundraising would be good for existing SEEIT investors because it would increase portfolio diversification and liquidity in the shares. “It’s a big marketplace out there,” he said.