SDCL Energy Efficiency Income (SEIT ) CEO Jonathan Maxwell has bought 20,000 more shares in the £1bn investment in a bid to highlight the anomaly of their double-digit discount to net asset value (NAV).

‘Amid a global market backdrop of high energy prices, energy security concerns and a cost-of-living crisis, policymakers and corporates recognise that energy efficiency has never been more valuable. I have purchased shares in SEIT because I strongly believe the market price today does not reflect the value of the portfolio or its total return prospects,’ Maxwell said when announcing his latest purchase on 3 February.

The transaction at 93.3p lifts Maxwell’s stake to 220,000 shares, worth just over £205,000 at the time, or 0.2% of the 6%-yielder, according to Refinitiv data.

The price has since slipped to 91.6p, leaving them at a 12% discount to their last NAV of 104.6p on 30 September. This valuation was published with half-year results in December, with the next six-monthly update due in June, when the portfolio of solar, storage, gas, biomass and combined heat and power projects reports its annual results.

The discount is a problem for SDCL which, like other infrastructure funds, is a regular share issuer, having made six placings in its five-year history to repay borrowings and make further investments. It last raised £135m in September in an issue at 114p, but cannot risk issuing more shares below NAV for fear of diluting investors.

3i Infrastructure (3IN ) was criticised by analysts yesterday for launching a share issue set at a small premium to a ‘stale’ two-month-old NAV.  

Like many other renewable infrastructure funds, SDCL de-rated in the turbulent aftermath of the mini-Budget in September. Uncosted plans to cut tax and increase spending resulted in UK government bond yields spiking to more than 5%, piling pressure on funds as their discount valuation rates rose. Although gilt yields have subsided somewhat, it is not uncommon to see energy efficiency and renewable energy funds trade more than 20% below asset value.   

The trust’s directors and fund managers at Sustainable Development Capital last bought shares at their October lows as they reassured investors of the trust’s financial position and the inflation link to its investment returns. The closed-end fund won a Citywire award for best renewables infrastructure fund in November.

The bar to fundraising is not an immediate problem for SEIT, which in November had £120m cash and £110m left on its credit facility.   

Including dividends in the total return, the shares have fallen 3% over three years.