Foresight Solar Fund’s (FSFL’s) board and investment manager have renegotiated the trust’s fee arrangements to “deliver substantial cost savings to the company” amid a period of challenging performance for the renewable energy sector.
In a London Stock Exchange announcement published today (18 February 2025), FSFL’s board said it is “acutely aware of the growing preference… for management fee structures to more closely reflect the share price performance experienced by shareholders”.
As such, management fees will be applied to an equal combination of the trust’s average closing market cap each quarter, and its published NAV over the same periods.
Percentage rates applied to each tier of weighted value will also fall from 1% per annum of NAV for those with up to £500m invested, to 0.95%. For those with over £500m invested, percentage rates will fall from 0.9% of NAV to 0.8%. These changes will be put in place from 1 March this year.
See also: Foresight acquires impact specialist WHEB Asset Management
FSFL’s board has also announced that current chair Alex Ohlsson will step down from his role, with Tony Roper to become chair from September this year. Roper, who was appointed to the board as a non-executive director in November last year, is also independent non-executive chair of SDCL Energy Efficiency Income Trust and chair of abrdn European Logistics Income.
Elsewhere, FSFL’s board acknowledged “unprecedented market challenges which the listed renewable infrastructure sector and Foresight Solar are currently experiencing”.
According to data from FE fundinfo, the average trust in the IT Renewable Energy Infrastructure sector has fallen by 26.99% in total return terms over three years, and 21.6% over five years. FSFL has fallen by 6.1% and 5.5%, respectively, over these time frames, while its discount to net asset value currently resides at 31.8%, according to AIC data.
FSFL’s board said: “While the board remains confident in Foresight Solar’s portfolio and took early actions to respond to the market environment, such as undertaking a sizeable share buyback programme, the board is aware that in the near term this by itself is unlikely to lead to a re-rating of shares.”
It added that shareholders have expressed a range of views over the months as to the outlook for the trust, including “a desire for liquidity”, as well as “ongoing exposure to the listed renewables sector through a vehicle with greater secondary market liquidity and scale to drive efficiencies”.
Alex Ohlsson, chair of FSFL, said: “We are pleased that we have been able to negotiate a new fee arrangement, which better reflects the current market conditions and investor sentiment.
“We are cognisant of the challenges our shareholders face. We are urgently adapting to new, complex times and will continue to engage with shareholders as we consider a range of strategic options while continuing to deliver on our near-term objectives.
“I would like to thank shareholders for their ongoing engagement and support, and the board looks forward to updating them further in due course”.
This article first appeared on PA Future’s sister site Portfolio Adviser
