Gresham House, an alternative asset management firm, is aiming to raise £200 million to invest in utility-scale energy storage for the National Grid.
The Gresham House Energy Storage Fund will support the growth of renewable energy sources such as wind and solar, which is essential for the UK’s target to reduce carbon emissions.
Ben Guest, head of Gresham’s New Energy division, said: “A change is coming in the nature of power in this country. We are determined to be part of this revolution that will contribute significantly towards a low carbon economy.”
The firm is planning to complete an initial public offering (IPO) on the London Stock Exchange in early November and has already secured £30 million from its management team and institutional investors.
The initial £200m it hopes to raise from the IPO and subsequent placing programme will be used to invest in a network of industrial lithium-ion batteries for the storage of renewable energy.
These Energy Storage Systems are essential infrastructure for enabling the UK’s increasing reliance on renewable energy sources.
Gresham House has already identified a portfolio of five fully-operational battery storage facilities for the fund to invest in with a combined capacity of 70 megawatts.
The UK currently generates more than 40 gigawatts of renewable energy, which represented around 30 per cent of total electricity generation in the first quarter of 2018. This is set to double by 2023.
Mr Guest said: “The UK energy storage market is set for significant growth. However, the total potential of energy storage is currently limited by a lack of experienced operators, and this problem will only intensify, with demand for storage rapidly increasing as the deployment of renewable energy installations continues apace and the traditional coal and gas fired generation is retired.
“We believe energy storage has significant potential from an institutional investment standpoint and is the key to a renewable energy future in the UK.”
With a targeted yield of seven per cent, the fund aims to generate substantial financial returns for its investors while supporting the shift from finite resources to a clean energy world.
Gresham says the fund offers investors a diversified and robust source of income, independent of renewables subsidies or the absolute level of power prices.
Rupert Robinson, Managing Director of Gresham House Asset Management, added: “We are excited to bring this opportunity to invest in energy storage systems to institutional and high net worth investors.”
He said what sets the fund apart is the proven expertise of the management team in this highly specialist sector and the cornerstone investment of more than £30m.
This is the first investment trust IPO for Gresham House, having taken over management contracts for two other investment trusts previously.
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