The Fund recorded a gain of 3.57% in October (C Accumulation GBP). Underlying portfolio companies were broadly evenly split between positive and negative contributors and overall performance was driven by notable strength in a handful of companies with exposure to the US market where greater policy visibility afforded by the OBBB and safe harbouring update has provided the impetus for companies in the sector to re-rate. An acceleration in data centre-driven demand for power has also provided a tailwind, particularly for those with the capability of delivering baseload/firm power such as Brookfield Renewables. The company recorded a portfolio-leading total return of 28.8% in October, while Clearway Energy Inc. (+15.8%), EDP Renovaveis (+13.7%) and Northland Power (+12.4%) also contributed significantly to performance (all returns GBP-adj.). Offsetting this to an extent were a number of UK-listed renewable energy generators including Octopus Renewables Infrastructure (-6.4%), Greencoat UK Wind (-5.6%) and Bluefield Solar (-4.8%), which remain underappreciated and unjustly rated by markets, in the manager’s view. Income yields available to investors from this cohort of critical asset owners remain elevated – in excess of 10% in many cases - and are well supported by contracted cash flow streams. While capital performance remains challenging, the reliable dividend distributions are helping to underpin the Fund’s yield objective.

Aquila European Renewables announced it had entered into agreements to sell 90MW of wind assets located in Greece and Denmark. The total cash consideration of €61.9 million represents an approximate discount of 17% to the June 2025 valuation for these assets. While the price achieved reflects a sizeable uplift when compared to the valuation implied by Aquila’s share price (the shares trade at an approximate 30% discount to NAV), the news is disappointing – particularly as it follows the recent, more successful sale of the company’s stake in the Sagres hydroelectric plant in Portugal for which it achieved NAV. The company intends to make an initial cash distribution to shareholders of not less than €63 million upon completion of the disposals.

During the period Downing Renewables & Infrastructure announced that regulatory clearances had been satisfied in relation to its pending acquisition. The outstanding position in the portfolio was sold in the market at an immaterial discount to the takeover price in order to free up capital for alternative uses. The company, while ultimately having a limited five-year lifespan, delivered positive capital performance and attractive levels of income distributions to the Fund during this time.

Additional sales of note included continued top slicing of Northland Power, Meridian Energy, ERG, Brookfield Renewables and Corporacion Acciona Renovables following strong relative performance. In September’s commentary, we noted that a new position had been established in Spain electricity transmission network operator, Redeia. Purchases ceased in October owing to a sharp uplift in the share price, however, a retracement allowed for purchases to recommence in early November. Redeia’s 9-month Trading Update demonstrated robust performance at its core transmission network operation in Spain with EBITDA up 3% year-on-year and the company reiterated full year guidance.