In this webinar, William Argent, manager of the TM Gravis Clean Energy Income Fund and senior research analyst Shayan Ratnasingam provide an update on the clean energy sector, the market backdrop, fund performance, and key positioning shifts. They include a deep dive into the growing investment opportunity in transmission infrastructure.

You can watch the webinar replay here:

• The strategy is income-focused, targeting a 4.5% yield, delivering a yield of 5.9% (C Inc GBP) yield as at end of November 2025.

• The investment universe focuses on the clean energy sector, primarily through income-producing clean energy infrastructure assets.

• The Fund focuses on operational assets with predictable cash flows, benefiting from long-term power price agreements, regulated revenues, or subsidy regimes.

• It typically avoids the more cyclical elements of the sector, such as supply or companies with significant development risk.

• Core exposures include wind, solar, hydro, energy storage and transmission networks.

• The Fund has an established track record, turning eight years old later this month.

• The regulatory and political uncertainty that affected the sector over the last 12 to 18 months has eased.

• A major factor was the resolution of the uncertainty surrounding the US's new energy policy, specifically concerning tax credits and the "One Big Beautiful Bill". The market ended up with a "much softer landing" than initially feared.

• In the UK we saw the conclusion of the Review of Electricity Market Arrangements over the summer.

• There has been a reformed outlook for power demand globally, reinforced by the rise of AI and data centres and strategic partnerships between Hyperscalers and Large-Scale Power Generators, whilst the electrification of heat and transport remain key drivers of global electricity demand.

• The Fund's year-to-date performance is positive, delivering 6.8% (C Acc GBP) to end of November. Its annualised CAGR since inception is 4.5% (C Acc GBP).

• Recent headwinds are abating, and the Fund Manager argues that there is an asymmetric chance for upside capital performance given the current ratings of the companies held within the Fund.

• The overall positive return year-to-date masks significant divergence within the portfolio. Positive drivers included North American yield cos and European integrated independent power producers/utilities.

• Despite overall detraction from UK closed-end investment companies, strong returns were seen from companies such as Harmony Energy, Downing and Gresham House Energy Storage (up nearly 75% YTD).

• The Fund is actively managed, taking profits from surges in share prices and reinvesting into lowly valued, high-income producing exposures.

• 2025 has been a "recalibration year" for absolute distributions following very strong distribution years between 2022 and 2024.

• This recalibration is driven by the loss of certain high-yielding, irreplaceable names due to M&A activity. Additionally, some North American companies have refocused cash flows towards value-enhancing development, thus changing their payout ratios.

• The trailing yield on the Fund is 5.9% (C Inc GBP), which compares favourably with the Fund's 4.5% target.

• The Fund Manager expects distributions to consolidate this year and look to grow again in 2026.• UK Listed Closed-Ended Investment Companies pay out a large proportion of their income, with dividend coverage generally in the 1.1 to 1.3 range. North American yield cos typically have solid coverage with payout ratios of 60–70%.

• Electrification Theme: the Fund benefits from the broader electrification of the economy, noting that while AI and data centres are key topics, they account for just under 10% of global electricity demand growth. Other prominent drivers include transport (EVs, green hydrogen), heating/cooling, and desalination.

• Transmission focus: increased integration of renewables requires a transformational change to the grid, which creates an exciting investment opportunity. This is needed because distribution and transmission networks have not seen the same investment growth as generation assets: a recent IEA report highlights that 40% of distribution grids in developed markets are over 20 years old, halfway into their lives are already at maximum capacity; we are also seeing structural shifts with increased intermittent power from renewables.

• Investment attraction: transmission assets operate as regulated monopolies, ensuring predictable regulated returns and enhanced returns from CapEx programmes. They feature inflation protection through indexing the regulatory asset base (RAB) or allowed return. Crucially, they have no power price exposure.

• New exposures: the Fund recently added two European transmission operators to the portfolio:

◦ Terna (Italy): Europe’s largest independent energy transmission owner and operator, with 84% of EBITDA from regulated activity. Italy has ambitious targets, looking to nearly double generation capacity by 2030, requiring significant CapEx.

◦ Redeia (Spain): Acts as Spain’s transmission owner and operator, covering 94% of the market, with 90% of revenues coming from the regulated business.

• UK policy uncertainty: UK listed Closed-Ended Investment Companies remain "very lowly rated" (some at 40% discounts to NAV). A key uncertainty is the consultation on the indexation of Renewable Obligation Certificates (ROCs) and Feed-in Tariffs (FITs).

• Indexation proposals: Proposal 1 suggests moving ROC indexation from RPI to CPI, which would have a modest impact. Proposal 2 is "far more punitive," potentially requiring CPI to catch up with RPI before indexation continues, which could stretch into the 2030s.

• The Fund Manager views punitive measures as "moving the goalposts," potentially damaging investor confidence in long-dated, capital-intensive projects. A final decision is expected in the coming weeks or early next year, and positive resolution could provide a strong catalyst.

• M&A Activity: corporate M&A activity has slowed since the summer update, though strategic reviews of assets continue in the UK (e.g., Bluefield Solar Income).

• Nuclear energy discussion: The Fund Manager is actively engaging with investors, and seeking feedback, regarding potential exposure to nuclear energy generation assets. Currently, the mandate restricts ownership of generation plants. Allowing this exposure would be primarily aimed at enabling investment in platforms that hold both renewable energy assets and nuclear power generation.

Important information

This article is issued by Gravis Advisory Limited (“GAL” or the “Firm”)), which is authorised and regulated by the Financial Conduct Authority. GAL’s registered office address is 24 Savile Row, London, United Kingdom, W1S 2ES. The company is registered in England and Wales under registration number 09910124.

TM Gravis Clean Energy Income (the “Fund”) is a sub-fund of TM Gravis Funds ICVC, which is a UK UCITS scheme and an umbrella company for the purposes of the OEIC Regulations.

The Authorised Fund Manager of TM Gravis Funds ICVC is Thesis Unit Trust Management Limited (TUTMAN), Exchange Building, St John’s Street, Chichester, West Sussex, PO19 1UP. TUTMAN is authorised and regulated by the Financial Conduct Authority. GAL is the investment manager of the Fund.

Any decision to invest in a Fund must be based solely on the information contained in the Prospectus, the latest Key Investor Information Document and the latest annual or interim report and financial statements.

GAL does not offer investment advice and this [document name] should not be considered a recommendation, invitation or inducement to invest in a Fund. Prospective investors are recommended to seek professional advice before making a decision to invest.

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This article has been prepared by GAL using all reasonable skill, care and diligence. It contains information and analysis that is believed to be accurate at the time of publication but is subject to change without notice. It is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Any recipients outside the UK should inform themselves of and observe any applicable legal or regulatory requirements in their jurisdiction.