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Also very interesting from the Offer Leaflet is this part "Target portfolio of 36 positions identified, with Non Disclosure Agreements and several bids underway, all ready to take investment"
So they already knew which companies they were going to invest in when the Fund started, and at the same time they listed AFC in the Example Holdings list. I doubt they would list companies in the examples list that were not in the shortlist of 36.
7 min proactive interview hers.
https://www.proactiveinvestors.co.uk/companies/amp/news/954402
It's nothing like Woodford. His was a daily pricing open ended scheme. This is an investment trust which has no need to liquidate its investments
Haggis - good article, do not like the inclusion of "private companies" They are not overly "marketable" reminds me of the downfall of Woodford.
"The Investment Adviser has developed an investible portfolio of listed and private companies and projects, for early investment by the fund".
Their Offer Leaflet is available on this page. It shows 'Example Holdings' on page 4, which includes AFC. Also on page 3 they list Fuel Cells as a target investment. It also states that "The Investment Adviser has developed an investible portfolio of listed and private companies and projects, for early investment by the fund".
https://hydrogenonecapitalgrowthplc.com/investors/ipo-documents/
They also offer a link to The Hydrogen Council report 'Hydrogen Insights'. As we all know, AFC are in the Hydrogen Council.
https://hydrogenonecapitalgrowthplc.com/about/hydrogen-sector-reports/
Maybe, as they have their IPO cash now and entered first day of dealings, they have put in a big order to be filled today, and that is why the SP is creeping up? CWR and ITM might have offered placings and thus no need for H1 to buy in the open market, so no rise there. AFC having done 2 big placings not long ago, may have said no thanks.
Recent 20min interview with the founders
https://www.panmure.com/hydrogen-one-capital-and-the-hydrogen-sector/
Barely raised enough funds to launch
Does anyone know if they’re buying into AFC, can’t yet seem to find holdings breakdown
(Hulf is an investment manager for HGEN).
‘Ultra nascent hydrogen:
Though the technologies involved are proven, clean hydrogen is very much a nascent space.
Hulf said globally barely a handful of projects globally are on-stream at the moment, but industry and governments are now rushing to build.
According to a McKinsey report for the Hydrogen Council published earlier this month, 359 large-scale hydrogen projects across industrial, transport, infrastructure and other sectors have now been announced, with 131 coming just since February.
For the portfolio, Hulf said they were in discussions over clusters of electrolyser projects around the ports in Rotterdam and Amsterdam, with end users of the hydrogen including cement and steel, as well as local bus companies.
HGEN will take stakes in these projects at the construction stage, achieving attractive yields to support the trust’s 10-15% annual total return target. Hulf said the technical risks were very low’, while engineering consultants Arup are also on board as a technical adviser.
The gap for the trust comes from being ‘one of the first movers in there from the financial sector’, given the incipient nature of the space and currently small ticket sizes, precluding many larger investors.
‘The biggest risk is not being able to get hold of the land to build the thing on, which is extremely low. And it’s getting the off-take agreement signed for the hydrogen,’ said Hulf.
The manager has some renewable energy experience from his Artemis days, as well as investing in some hydrogen and private companies. He added that Traynor’s background working at Shell (RDSB) and then later on natural gas projects in North Africa at Sound Energy was another help, given the similarity in terms of project financing, structuring and off-take agreements with buyers of the hydrogen.
While this recalls the structure of trusts in the renewable energy infrastructure sector, Hulf emphasised this is not an income fund and they plan to sell the assets once they have a track record of cash flows.
Hulf expects the relationship with Ineos, struck via the managers’ traditional energy network, to help with access. The company controlled by billionaire Jim Ratcliffe has co-investment rights in HGEN projects, while the trust will also gain the option but not right to invest in Ineos ventures.
Overall, Hulf said the response so far had been ‘very encouraging’ and expressed massive excitement for the future of the sector.
‘We’re starting from a very low starting point in terms of investment. So even if it does end up as being only 10% of the primary energy mix by 2050, there’s an awful long way to go to even get halfway there,’ he said.
‘And so that’s what this fund is trying to capture.’
The share issue, which closes on 27 July, is available on most UK investment platforms via an intermediaries offer. A prospectus is available on the company’s website. Panmure Gordon is acting as the spons
Ineos backs UK's first ‘clean hydrogen’ trust in £250m launch
By Jeremy Gordon 05 Jul, 2021
12Comments
HydrogenOne Capital Growth (HGEN) has already secured a cornerstone investment of at least £25m from Ineos, the world’s third-largest chemicals company, controlled by billionaire Jim Ratcliffe.
The ‘first of a kind’ investment company, which is seeking to take advantage of burgeoning activity in the space during the energy transition, will be managed by sector specialist HydrogenOne Capital.
In a document revealing its intention to float, HGEN said it would aim for a total return of 10-15% annually by investing in a mix of public companies and private businesses not quoted on any stock exchange.
The lead managers of the portfolio will be John Joseph Traynor, who has held several senior banking and energy sector roles including executive vice-president at Shell (RDSB); and Richard Hulf, a fund manager with 30 years’ experience in the utilities and energy sectors.
Targeting hydrogen and complementary hydrogen-focused assets, the managers said the fund would have an investible universe of around $90bn. They have identified 36 prospective investments, including a number where they have conducted detailed due diligence and made indicative non-binding offers.
The managers said they saw the potential for ‘green’ and ‘blue’ hydrogen projects, or both those where hydrogen is generated by renewable energy sources, as well as ‘blue’ hydrogen produced using natural gas where the emissions are captured and stored.
‘Clean hydrogen is a fast-moving and complex sector, that commands a specialist approach with access to private equity, to unlock value for shareholders. We have established HydrogenOne to fill that gap,’ said Hulf.
Ineos Energy will make a strategic investment of at least £25m in the initial public offering (IPO) and has been granted the right to co-invest in any additional capacity in private projects identified by HGEN, as well as the right to appoint a non-executive director to its board.
Brian Gilvary, Ineos Energy’s executive chairman, said the investment would ‘help to accelerate and diversify Ineos’ existing clean hydrogen strategy’.
‘It marks the beginning of another substantial and long-term partnership, opening new windows into the clean hydrogen world for Ineos,’ he said.
According to HydrogenOne, there has been a sharp acceleration in clean hydrogen projects, with a 60% increase in announced production capacity in the period to 2030 over last 12 months.
The HGEN launch follows the Liontrust’s decision to pull its plans for an investment trust focused on environmental, social and governance principles last week, after failing to hit the £100m minimum target.
Closed-ended funds focused on alternatives and private assets have been much more successful in raising new cash, however. In the first half of 2021, trusts in the Renewable Energy Infrastructure sector – where HGEN may not sit, but has some natural affinity – raised
Respected writer in Sunday Times, Business, Section Ian Cowie: new trust offers chance to buy hot sector without overpaying
hTTps://www.ii.co.uk/analysis-commentary/ian-cowie-new-trust-offers-chance-buy-hot-sector-without-overpaying-ii520909
Worth noting HL has a deal where you will gain an additional 0.5% of shares as a bonus for your initial investment! (ii and AJ Bell are not offering such a bonus.)
hTTps://citywire.co.uk/investment-trust-insider/news/hydrogen-trust-fights-bezos-and-gates-for-green-sweet-spot/a1533699
Not sure if discussed already, but has anyone looked at this new fund launch next week?
The prospectus appears to indicate they will be looking at private and listed companies (12 private, 20 listed) for initial investment, and for those 20 listed companies "with a current preference towards fuel cell companies that also have growing electrolyser capacity, as well as fuel cell manufacturers themselves"
They estimate that 20% of the listed company allocation could be in companies with an mcap of <0.5bn.
So, out of 32 potential companies in the portfolio, there are 4 potential spaces to fill where AFC sits in the criteria (sector, country restrictions, etc will apply)..
The country bias will be skewed towards UK and Norway.
Also from the prospectus:
Listed stock selection by the Investment Adviser will be based on the following criteria:
- Minimum market capitalisation of US$200 million but with a preference for at least a US$1 billion market capitalisation.
- Preference for companies with current revenues and rapid revenue growth plans.
- Preference for manufacturers with systems integration capability.
- Companies with strong intellectual property and licensing/contracted manufacturing strategies.
- Growth potential and scalability with expansion plans.
- Prefer companies with industrial strategic investors
So, potential for an influx of buying here next week, if AFC is on the target list?