The £314m renewable energy trust NextEnergy Solar fund has initiated a series of sweeping changes to its mandate as part of a broader strategic reset, the firm announced this morning.
It will adopt a total return strategy, targeting a 9-11% long-term return, while maintaining an attractive level of income for investors.
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The estimated dividend range for 2026/2027 is currently around 7-8%. It will fund this through a 75% distribution of free cash flows, debt servicing and fund operating expenses.
Other proposed measures include reducing total gearing to 40-45%, restarting NAV growth through increased investment in energy storage infrastructure and a regular capital recycling plan.
Tony Quinlan, chair of the NextEnergy Solar fund, said: “Following a comprehensive strategic review, the board has concluded that recalibrating the company’s strategy is essential to ensure NESF adapts to the evolving equity and power markets and is positioned for sustainable growth.”
During the strategic review, the board assessed several options, including maintaining the status quo, winding down, shifting to an open-ended fund or even consolidating with others in its sector. However, the reset was deemed the best option for shareholders and the company.
The fund has struggled to deliver value for investors over the longer term, down by -28.2% over the past three years. However, it’s gotten off to a much stronger start in 2026, with a 14.1% total return compared to the IT Renewable energy infrastructure sector average of 1.8%.
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