Ready to reinvest: Solar portfolio sale delivers positive outcomes for investors
In April 2024, we completed the successful sale of our solar power portfolio to a fund specialising in the consolidation and management of renewable energy assets.
The profitable divestment marks our exit from the renewable energy sector. It unlocks further opportunities to redeploy investor capital into areas where we see greater potential for value.
Steady return
Progressively built up since 2012, our solar power investments included panels sited on both commercial and domestic rooftops.
For our investors, the portfolio delivered both a steady income from the power generation and a positive return following the sale. As the solar assets qualified for Business Relief, they have also helped our Inheritance Tax Service investors to reduce their inheritance tax liabilities.
Time to move on
So why have we divested our solar power portfolio? The income stream for investors has been bolstered by Government subsidies aimed at helping the UK meet its renewable energy targets. However, the subsidies that our portfolio benefits from are finite. This means that the assets will decrease in value the closer they get to expiration. Now is therefore an opportune time to sell the assets while they remain attractive to specialist purchasers and ensure we generate a positive outcome for investors in the process. Government support has been scaled back in recent years and the market has become saturated. We therefore see less opportunity in this sector to generate attractive returns. The acquiring fund has the economies of scale to incorporate our solar panels into their wider portfolio.
The divestment of our solar portfolio completes our move out of power generation having also sold our wind farm investments at the end of 2022.
Firm commitment to sustainability
The divestment from renewable power generation does not diminish our strong commitment to sustainability. At Stellar Asset Management, we recognise the importance of our position as stewards of clients’ capital. As owners of each business within our asset-backed portfolio, we also recognise that we have both the opportunity and responsibility to protect and enhance the environment while sustaining upside returns. Our latest environmental, social and governance (ESG) Spotlight sets out how we are incorporating ESG and sustainability into the management of asset-backed portfolio.
New opportunities opening up
We have a number of deals in the pipeline and expect to redeploy the proceeds from the solar power portfolio sale to help fund attractive opportunities for investors across different sectors. These include forestry acquisitions and hospitality and leisure assets. Whilst we are in the due diligence phase currently, we expect these acquisitions to take place in Q2 2024.
Delivering for our investors
David Stein, Investment Manager at Stellar Asset Management, has been closely involved in the solar power portfolio sale and the development of plans to reinvest the proceeds. Commenting on the divestment and the opportunities it opens up, he said: “We are pleased that the solar power portfolio sale has provided a positive outcome for our investors. It ensures the renewable power generation from our solar panels is sustained while delivering a profitable return and enabling reinvestment in new opportunities.”
Important Information
Stellar Asset Management Limited does not offer investment or tax advice or make recommendations regarding investments. Prospective investors should ensure that they read the brochure and fully understand the risk factors before making any investment decision. The value of investments and the income from them may fall as well as rise and is not guaranteed. No assurance or guarantee is given that any targeted returns will be achieved. Forecasts of potential future results are not a reliable indicator of actual future results.
Stellar Asset Management Limited of 20 Chapel Street, Liverpool, L3 9AG is authorised and regulated by the Financial Conduct Authority.