Schroders plc, the UK’s biggest listed asset management firm, has confirmed that it is in talks with Greencoat Capital, a London-based specialist renewables investor, to acquire a significant stake in the business.
“Schroders plc notes recent media speculation and confirms it is advanced talks with Greencoat Capital, a leading European renewables manager, about making a significant stake in the business,” it said in a release on the London Stock Exchange’s (LSE) regulatory news service (RNS). “There is no certainty these talks will lead to any final agreement.”
According to Sky News, which broke the story, Schroders could take a 75 percent stake in Greencoat at a cost of around £360 million.
Greencoat currently manages a range of listed and unlisted vehicles that invest in and operate renewable energy sources such as solar farms, wind farms and bioenergy producers.
“Our overriding goal is to remain the leading global specialist in acquiring and then operating renewable assets for institutional investors,” Greencoat says on its website. “No advisory, no principal investing, no retail”.
The listed vehicles include two investment trusts; Greencoat Wind plc and Greencoat Renewables plc.
Greencoat Wind plc invests in and operates wind farms within the UK. According to its latest annual report it had interests in 38 wind farms at the end of 2020.
With a market capitalisation of around £2.60 billion and net assets of £2.56 billion at the end of September 2021 Greencoat Wind is a constituent of the FTSE 250 Index.
It aims to provide investors with an annual dividend that increases in line with RPI inflation, while preserving the capital value of the portfolio.
Greencoat Renewables plc is the owner and operator of euro-denominated energy assets for which Greencoat Capital is the investment manager.
It had net assets of EUR 751.3 million at the end of September, according to its latest fact sheet and a market capitalisation of EUR 845.00 million.
Greencoat also manages money in a range of unlisted funds and segregated mandates for institutional investors such as UK pension funds.
UK Solar II, one of its solar energy vehicles, currently has more than £1 billion of assets under administration.
For its part the acquisition of all or part of Greencoat would meet Schroders declared strategy of increasing its presence in the private assets and alternatives market segments as well as enhancing its ESG credentials.
At the end of 2020 Schroders had £574.40 billion of assets under administration with reported net income and pre-tax profits of £2.18 billion and pre-tax profits before exceptional items of £702.3 million.
