Six renewable infrastructure investment trusts have passed continuation votes in the last two months despite persistently mammoth discounts and calls for consolidation within the sector.  

In order of passing, the trusts which have won support in shareholder votes on their futures are Greencoat UK Wind (UKW ), Greencoat Renewables (GRP ), US Solar (USF ), Downing Renewables Infrastructure (DORE ), Octopus Renewables Infrastructure (ORIT ) and last week Foresight Solar (FSFL ). 

All six trusts – which own everything from giant UK offshore windfarms to renewable generation assets across Europe – met the requisite majority of support, with over 80% of voters in each example opting for continuation.

Downing Renewables Infrastructure subsequently accepted a bid at a large premium to its share price on Friday. 

NextEnergy Solar (NESF ) is another name in the sector which is clearly considering its future, having announced it is exploring ‘strategic options’ in annual results last Monday. 

For observers of the space and its bombed-out valuations, the news of continuation votes being passed en masse may come as a surprise.

The average discount in the 18-strong Renewable Energy Infrastructure sector tracked by the Association of Investment Companies (AIC) is nearly 26%. 

Out of the trusts above, US Solar comes out worst on that measure, with its shares trading at a 38.7% discount to the portfolio’s stated valuation.

Hawkmsoor’s Ben Mackie explained that in many cases, the percentage of votes in favour of continuation has actually increased on last year. 

‘At first glance this does seem odd,’ he told Citywire. ‘Considering the discounts are equally as wide and obviously a year further down the track, you’d expect patience to be wearing thin.’

Mackie co-manages three multi-asset strategies, the Vanbrugh , Distribution and Global Opportunities fund, with significant exposure to London-listed investment companies. 

Across the funds, core holdings include Greencoat UK Wind and the Renewables Infrastructure Group (TRIG ), as well as smaller stakes in FSFL, DORE and Foresight Environmental Infrastructure (FGEN ). 

Trying to explain the conundrum, Mackie said: ‘I don’t think a vote for continuation should necessarily be read as a seal of approval or a sign that everything is fine, that shareholders are happy with the status quo. 

‘I know we’re certainly having lots of conversations with boards, back channel discussions where [we’re] making points around what needs to happen at the company without actually having to vote for discontinuation.’ 

In that vein, Octopus Renewables’ recognition of the 20% of shareholders who voted against the re-election of chair Philip Austin might be read as one surface ripple of underlying dissatisfaction. 

Additionally, Mackie added that ‘some of the support for continuation is a recognition that liquidating these portfolios, realising these assets, isn’t as conducive as people once thought’. 

‘We’ve seen lots of these funds talking about disposals and quite a few of them are significantly behind schedule. Private market transactions have been really thin.’

Mackie also noted that ‘waving the “for sale” sign’ might not be the best way to realise value for shareholders. 

On a more positive note, the manager pointed out that while yields in the sector remain high, shareholders are being ‘paid to wait’ for discounts to narrow.