Greencoat Renewables pays investment manager €3m-plus

Wind farm operator plans to keep buying into plants to harvest electricity and revenue

Greencoat Renewables had a net asset value of €309 million on December 31st. Photograph: Simon Dawson/Bloomberg

Greencoat Renewables had a net asset value of €309 million on December 31st. Photograph: Simon Dawson/Bloomberg

 

Wind farm operator Greencoat Renewables paid its investment manager more than €3 million last year as the business grew its assets.

UK-based partnership Greencoat Capital acts as investment manager for the Dublin-quoted electricity company, receiving a fee of 1 per cent of its net asset value.

Figures released this week by Greencoat Renewables show that it paid the partnership a management fee of €3.04 million in 2018. The company had a net asset value of €309 million on December 31st.

Greencoat Capital is a limited liability partnership based in Britain. Its partners are Laurence Fumagalli, Bertrand Gautier, Stephen Lilley and Richard Nourse, who all have backgrounds in utilities and investment management.

Their holdings in Greencoat Capital were worth £9.6 million (€11.1 million) on March 31st, 2018, the end of the partnership’s last financial year.

Its returns state that it had no members other than the four men and indicated that they held equal stakes in the firm.

In Britain, the partnership manages investments for Greencoat UK Wind, a London-listed renewable energy player worth about £1.5 billion, and two solar energy funds.

Along with Greencoat Renewables in the Republic, the firm advises the State-owned ESB’s €200 million green technology fund, Novusmodus.

Future expansion

The agreement between the Irish renewables business and Greencoat Capital only ties the investment manager’s fees to the wind farm operator’s assets. There are no payments linked to performance.

However, Greencoat Renewables is likely to increase payments to its investment manager in the future as the Irish company indicated this week that it intends to keep expanding.

This means that its assets should continue growing, which in turn means that it will increase the fees paid to Greencoat Capital in line with the agreement. The Greencoat Renewables board, led by chairman Ronán Murphy, determines the investment policy while the partnership executes it.

In his statement, Mr Murphy said that the company saw a large number of attractive opportunities and would focus only on those likely to boost Greencoat’s value. The company is not a developer. It only buys into plants that are complete and generating electricity and revenue.

Wind farms in the Republic get guaranteed prices for the electricity they provide. Businesses and consumers underwrite this by paying a public service obligation fee on their electricity bills. Homes and employers will contribute €209 million under that scheme this year.

While that system, dubbed the Renewable Energy Feed-In Tariff, will continue to support existing wind farms, Government and regulators will soon introduce new supports for future green electricity projects likely to involve less direct aid from customers.