The Fund recorded a 3.45% return in July (C Accumulation GBP) as recent positive momentum accelerated further. A vast majority of underlying exposures contributed positively to performance as the broader UK-listed infrastructure segment continued to benefit from a resurgence in investor interest.

Greencoat UK Wind, a high conviction position within the portfolio, was the single greatest contributor to performance with a 10.1% total return in July. The company reported an encouraging set of interim results with first half EBITDA +23% at £353m and net cash generation +36% at £222m driven by output ahead of budget and elevated power prices. Greencoat locked in 1TWh of short-term price fixes during the period and a further 0.5TWh post period end to capitalise on firm electricity pricing resulting from geopolitical events in the Middle East. Over the next three years, the company sees the opportunity to reinvest £500m-£600m of excess cash flow in repowering projects, land lease extensions, and new late-stage construction assets. The company’s ability to invest for growth is a key message to the market. All the Fund’s renewable energy generators contributed positively in July, led by Greencoat UK Wind, The Renewables Infrastructure Group and NextEnergy Solar.

In an unexpected move, given a recently announced strategy refresh, and having evaluated alternative options to maximise value for shareholders, the board of NextEnergy Solar announced the commencement of a Formal Sales Process. While the recent sale of Bluefield Solar Income at a single-digit discount to NAV sets a precedent, we are cognisant that NextEnergy Solar is likely to be a more complicated entity for any potential acquirer. Considerations include its broader geographic exposure, its capital structure, and its co-investment in private vehicles.