Ventus VCTs to raise GBP20m for investments in UK hydro and wind power
Ventus VCT plc and Ventus 2 VCT plc have issued a joint offer for subscription for D shares to raise up to GBP20m.
Proceeds raised will be split equally between the two venture capital trusts and invested in an existing pipeline of wind and hydro projects by investment manager Temporis Capital.
The captive projects make it possible to fully deploy the capital raised within 12 months.
Investors in the D shares will have a targeted minimum annual dividend of 5p per share from year two onwards; accounting for tax reliefs embedded in the VCT structure, this would amount to a tax-free seven per cent yield on invested capital.
Temporis has a strong track record managing the construction process of wind and hydro projects and in doing so has delivered substantial capital appreciation. Renewable energy assets provide stable, long-term cash flows, underpinned by a government support mechanism that escalates by RPI; the Ventus VCTs offer access to this attractive income stream within a tax-efficient wrapper, with the potential for considerable capital gains.
Last year, the ordinary shares of Ventus VCT and Ventus 2 VCT delivered total returns of 26.01 per cent and 22.46 per cent, respectively.
Matthew Ridley, partner at Temporis, says: “More wind power has been installed in the UK in the last three years than in the previous 20 years, and the Ventus VCTs are well-positioned to take advantage of this upward trend. In December 2013, a month with unusually high wind levels, more wind power was produced in the UK than ever before. We are also confident in the outlook for hydroelectricity, the key advantage here versus other forms of renewable energy being the reduced visual impact on the landscape and long duration of operation. Hydro schemes are inexpensive to run and operate, and we expect to generate attractive total returns from them.”
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