The Fund recorded a loss of 1.67% in December, with an overall total return in 2025 of 4.98% (C Accumulation GBP). Encouragingly, positive performance momentum has resumed in the first weeks of 2026.

A majority of positions detracted from performance in December, with UK and US focused power producers generally among the worst performers. European generators posted some modest gains, while the only notable uplift came from Octopus Renewables Infrastructure following news it had agreed to sell stakes in two operational assets (one UK solar, one UK onshore wind) in line with holding valuations. The disposals form part of the company’s capital recycling programme (realising £74m in 2025), which aims to demonstrate valuations are appropriate, and enable the company to reduce debt levels and fund growth opportunities in line with its “ORIT 2030” strategy.   

While the weakness in US companies Clearway Energy Inc. and HA Sustainable Infrastructure Capital reflected a retracement of some of the prior month’s very strong gains, UK renewable energy generators continued to drag on performance with the government’s ongoing consultation into the basis of subsidy indexation weighing on the sector more broadly. In a bizarre situation, the indexation consultation (which looks at older subsidy frameworks and could ultimately result in adjustments being made to the original terms, as outlined in November’s commentary) runs in the background while the results of the latest round to secure new renewable energy capacity (via Allocation Round 7) are expected to be announced in mid-January. The Fund Manager recognises the concern this willingness to “move the goalposts” from the government may cause AR7 participants, with this appearing to be counterproductive to Labour’s ambitions to incentivise private sector investment in long-term infrastructure projects more broadly.

In a positive development for European transmission companies, where targeted exposure is meaningfully represented in the Fund through Terna Rete-Elettrica and Redeia, the EU Commission published its EU Grid package that will direct €1.2tn towards electricity grid infrastructure with an aim to help EU states fast-track permits for grid infrastructure and enable renewable energy, energy storage and interconnector projects.

Fourth quarter distribution announced

The provisional income distribution (subject to adjustment) for the fourth quarter of 2025, payable in January 2026, amounted to 1.5978p per C Income GBP unit. On this basis, a total declared distribution for 2025 of 5.8016p per C Income GBP unit was approximately 14% lower than the comparable total distribution in 2024. The reduction reflects the loss of high yielding names to M&A, as noted in previous Fund commentary. As at 31^st December, the Fund’s trailing 12-month yield was 6.00% for the C Income GBP units.