Schroders agrees to buy 75% stake in Greencoat Capital for £358m 1

Schroders agrees to buy 75% stake in Greencoat Capital for £358m

Advertisement

Schroders agrees deal to buy majority stake in renewable energy investor Greencoat Capital for £358m

  • The deal also includes a potential payout for Greencoat worth up to £120m
  • Schroders will add another £6.7bn in assets brought under its management
  • Greencoat’s listed UK wind fund has a market cap of more than £2.6bn 


Advertisement

Investment manager Schroders had struck an agreement to purchase a 75 per cent stake in green finance specialist Greencoat Capital.

The £358million deal also includes a potential payout worth up to £120million should Greencoat achieve specific revenue targets and its senior management continues to be employed over the next three years.

Advertisement

Schroders will see £6.7billion of additional assets brought under its management and gain control of five investment funds involved in financing renewable energy projects.

Green move: Schroders will see £6.7billion worth more assets brought under its management and gain control of five funds that are solely involved in financing renewable energy projects

Green move: Schroders will see £6.7billion worth more assets brought under its management and gain control of five funds that are solely involved in financing renewable energy projects

This includes Greencoat’s FTSE 250-listed UK wind fund, which has a market capitalisation of more than £2.6billion, as well as other funds focused on solar power, bioenergy, and investments in Europe and the United States.

It said the acquisition would expand its sustainability portfolio, help fund projects that bring the world closer to becoming net zero by 2050, and satisfy high investor demand for assets providing longer-term sources of income.

Advertisement

The company also pointed to Greencoat’s strong financial performance, noting that its compound AUM growth had jumped by around half in the last four fiscal years, while revenues had risen by 36 per cent.

Peter Harrison, the chief executive of Schroders, said: ‘Greencoat is a market-leading, high growth business, with an outstanding management team, which provides access to a large and fast-growing market in high demand among our clients.

‘Its culture is an excellent fit with ours, and Greencoat’s focus aligns very closely to our strategy, continuing our approach of adding capabilities in the most attractive growth segments we can provide to our clients.’

Greencoat forecasts the market for renewable energy assets in the United States and Europe to increase by more than $1trillion up to the end of the decade.

Advertisement
Reasons: Schroders said the acquisition would expand its sustainability portfolio and help fund projects that bring the world closer to becoming net zero by 2050, among others

Reasons: Schroders said the acquisition would expand its sustainability portfolio and help fund projects that bring the world closer to becoming net zero by 2050, among others

Schroders has helped propel this trend, buying a majority stake in impact investment manager BlueOrchard in 2019 and launching the Schroder ISF BlueOrchard Emerging Markets Climate Bond fund not long afterwards.

It followed this up a year later with the BSC Social Impact Trust, raising gross proceeds of £75million in its initial public offering, though this was still £25million short of its target.  

Greencoat founder Richard Nourse, said: ‘We are extremely proud of what the brilliant team at Greencoat has together achieved, creating a market-leading renewables asset management firm in the UK and Ireland, a strong platform in Europe and an important expansion into the US.

Advertisement

‘Combining this team with Schroders’ global distribution network and expertise will enable clients to capitalise on the unequalled opportunity that our sector represents – a trillion dollar investable universe – and the chance to meaningfully support the global transition to net zero.’  

Shares in Schroders were up 2.6 per cent to £34.64 at around 11am on Tuesday. 

Advertisement

Advertisement

Advertisement
Advertisement

Similar Posts