The £490m Gresham House Energy Storage fund (Grid) has unveiled plans to change its investment policy which would see it, among other things, invest 30% of gross asset value (GAV) in “certain international markets”.
Outside of the UK, it can currently only invest a maximum of 10% GAV in Ireland.
Grid bannered up the benefits as being increased Ebitda and NAV growth, along with diversification into major markets “with similarities to the UK in terms of wholesale market structure, renewables growth and penetration where the market is often at an early stage resulting in stronger target returns compared with the UK”.
The markets for approval are the United States, Canada, the European Union and Australia.
All relevant approvals will be sought from shareholders and lenders, Grid added. It plans to issue a circular this month outlining all of the proposed amendments.
Markets 10 times the size of the UK
Chairman John Leggate said now is the time “to enter new geographic markets, which are most attractive in the early stages”.
“The intention is to pursue a disciplined focus, limiting the range of new markets to those with comparable market dynamics in the United States, Canada, the European Union, and Australia. The scale of the opportunity in these markets is large.”
He continued: “While the UK only currently represents about 1% of global electricity consumption; by comparison, the United States and European Union markets are among the world’s largest electricity markets, each being at least 10 times the size of the UK electricity market.”
Alongside the international pivot, Grid is looking to invest up to 10% of GAV in “shovel-ready project rights”. This, it said, would facilitate the option of a premium listing on the main market of the London Stock Exchange.
Grid sees 43% NAV uplift
The proposed investment strategy changes were included in the trust’s annual results for 2021, Grid’s third full calendar year since its IPO in November 2018.
NAV was up 42.6% at £511.7m, as of 31 December 2021, while NAV per share rose 13.5% to 116.86p.
