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Renewable Trust Bets on Diversified Green Future
22 Mar
Summary
- Foresight fund invests beyond wind/solar in diverse green infrastructure.
- Fund achieved 42% return over ten years, outperforming peers.
- Currently trading at a significant 32% discount to its value.
In the UK's shifting energy landscape, the Foresight Environmental Infrastructure trust offers a distinct approach to renewable energy investment. Unlike peers heavily focused on wind and solar, this £430 million fund, managed by Ed Mountney, Chris Tanner, and Chris Holmes, diversifies across environmental infrastructure. Only 38% of its portfolio is in wind and solar, with significant allocations to biomass, controlled environment glasshouses, and low-carbon transport.
This diversification strategy has proven resilient. While many renewable trusts have faced challenges due to rising interest rates, Foresight has delivered solid returns. Over the past decade, it returned 42%, surpassing the average renewable infrastructure trust's 42%. The trust also offers a growing dividend stream, with a yield of 10.9%, targeting 7.96p per share for the year ending March 31, 2026.
The fund's largest holding is the Cramlington Biomass plant in Northumberland, a successful investment that returned 25% within three years. Foresight's balanced approach, combining income-generating assets like anaerobic digesters with growth assets, ensures 80% of returns cover dividends. Currently trading at a notable 32% discount, the trust presents an attractive entry point for investors anticipating a narrowing of this gap and a continued drive for decarbonisation.
