Greencoat UK Wind (UKW )

Performance

The £3.3bn trust giant has comfortably passed its continuation vote, with 89.5% of investors, representing 60% of the share capital, supporting the fund. 

During the first quarter, Greencoat UK Wind’s net asset value (NAV) fell 0.8% to 150p per share as a result of falling power price forecasts. Low winds also caused generation to come in 18% below what was expected over the first three months of the year.

A 2.5p fourth quarter dividend took the total 2024 payout to 10p, while 2025 remains on track for a 10.5p payout.

Corporate action

The fund, which is run by Schroders, extended its ongoing buyback programme by a further £100m in February, with £200,000 worth of shares purchased in the first quarter. Management previously mentioned plans to accelerate potential disposals to free up cash for buybacks, although there was no mention of the progress of this plan in the latest trading update.

What the analysts say

Deutsche Numis analyst Andrew Rees said progress in disposals would help narrow the current 25% discount, ‘particularly if accompanied by a meaningful capital return’.

‘Furthermore, if sentiment towards the broader renewables investment companies sector improves, Greencoat’s size, liquidity and shareholder-friendly fee structure mean it should be a notable beneficiary,’ he said.

‘However, we believe investors’ willingness to reward the fund’s prospective 10%-plus net return on NAV will likely be helped by wind resource and energy generation returning to modelled levels for a sustained period.’

Ecofin US Renewables Infrastructure (RNEW )

Performance

The £55m portfolio, which is navigating a wind-down, offered up more bad news as its reported an almost halving of its NAV to $61.7m (£46.1m) over the 12 months to the end of December. Its NAV was down 46.5% over the period, while its shares sank 44.6% as a result of impairments, operational underperformance and write-downs. 

The macro backdrop has been a considerable headwind for renewables as the Trump administration pulled support for the sector and halted the construction of a vast wind farm off the New York coast.

Portfolio activity

A wind-down of the portfolio of US renewable assets started in January after a failed attempt to find a buyer. This resulted in the board making its first large disposal, offloading its ‘distributed generation solar portfolio’ in March for $33.5m. The proceeds were used to pay the fund’s revolving credit facility.

There are now two assets left to sell: wind farm Whirlwind and a 49.5% stake in Beacon 2 and 5 solar farms. Management has said it will consult with major shareholders before selling the assets for a bargain price.

Outlook

Chair of the fund Brett Miller said it was ‘not a forced seller at any price in the short term’. The board will review the two remaining assets to determine if anything needs to be carried out before any sale to improve the likelihood of receiving a fair price for shareholders.

The board is also taking into account the economic policies of the US administration which may impact the fund’s ‘ability to operate these assets while at the same time seeking a fair price’.

Baker Steel Resources (BSRT )

Performance

The £95m portfolio of natural resources stocks and private companies grew its NAV by 16.2% in 2024, driven primarily by increased valuations at Nussir, a private copper miner in Norway, Australian coal miners Bilboes Gold Royalty and Futura Resources, as well as Moroccan cement producer Cemos Group.

Cemos and Futura together represent 65% of the portfolio, and their ‘continued success in sourcing funding and progressing production’ more than offset falls elsewhere.

After a challenging 2023, Baker Steel Resources’ shares rose 43% in 2024. Although the fund does not have a formal benchmark, it noted the MSCI Metals and Mining index fell 13.5% over the same period. However, the fund still ended the year with a hefty 37% discount which the board described as ‘disappointing’.

Portfolio activity

In order to grow the forecast dividend income and royalty flows into the portfolio, the board said income will be supported by ‘selected asset disposals’ when the fund sees an opportunity to realise good returns or ‘where we perceive a development project could be more attractive to another industry player’.

This was reflected in the sale of the Nussir copper project to Canadian-listed Blue Moon.

Outlook

While 2024 was a bumper year for the trust, chair Fiona Perrott-Humphrey warned that trouble was already brewing at the back end of last year due to slower economic growth in China impacting demand.

While precious metals have benefited from a flight to safety during the recent tariff turmoil in markets, she points to increased volatility in exchange rates and borrowing costs which makes financial forecasting significantly more challenging.

Marwyn Value Investors (MVI )

Performance

The £114m portfolio of UK and European smaller companies has delivered an impressive return in a year that was dominated by large and mega-cap stocks. Over the 12 months to end of 2024, the trust grew its NAV by 19.4% versus a 13.8% rise by the FTSE Small Cap index. Meanwhile, Marwyn’s shares were up 26.6% over the same period.

Dividends equivalent to 9.06p per share were paid over the year.

Marwyn Asset Management’s James Corsellis, manager of the trust, flagged communications group Zegona’s (ZEG) acquisition of Vodafone Spain as ‘transformational’. It is now the the largest position in the trust.

He also highlighted software developer AdvancedAdvT as another performance driver in 2024.

Manager news

Corsellis increased his shareholding in the fund over the year to 11%, as part of ‘increased manager alignment’.

Outlook

The trust is close to fully invested in what Corsellis described as an ‘extremely exciting portfolio of companies’.