Gore street energy storage fund

Heedtheadvice

Hi all.

This investment trust seems to have a lot going for it based upon income performance and what they report.

However after maintaining it's NAV and increasing it's share price (to a premium) it has fallen somewhat in just recent days.

Any insight as to why?

Maybe just not as much in demand (premium had risen) but why?

Underlying prospects (green credentials, assets, income, management) do not seem to have changed and it has held up well when other investment generally have been on a longer downward curve.

I hold it for the long term and not particularly worried about a short term decline but just trying to understand the causes plus wondering if it could be another buying opportunity to top up a bit.

redpete

Would Labour's recently announced policy of setting up a Government-owned green energy company have affected the prospects of privately-owned green energy companies?  Or maybe just affected by the same reasons behind drops in the UK equity market as a whole?  (I haven't checked Gore St vs FTSE index vs sector index)

Albermarle

All ( or most) infrastructure/renewable energy funds have fallen in recent days. Seems to be linked to interest rates and inflation, affecting the valuations of these companies. Not sure if this is also affecting this fund.

bostonerimus

If they have any borrowing it just got more expensive. I've never understood why people are interested in such focussed and risky investments as part of their portfolio.

Albermarle

bostonerimus said:

If they have any borrowing it just got more expensive. I've never understood why people are interested in such focussed and risky investments as part of their portfolio.

Diversification .

wmb194

Heedtheadvice said:

Hi all.

This investment trust seems to have a lot going for it based upon income performance and what they report.

However after maintaining it's NAV and increasing it's share price (to a premium) it has fallen somewhat in just recent days.

Any insight as to why?

Maybe just not as much in demand (premium had risen) but why?

Underlying prospects (green credentials, assets, income, management) do not seem to have changed and it has held up well when other investment generally have been on a longer downward curve.

I hold it for the long term and not particularly worried about a short term decline but just trying to understand the causes plus wondering if it could be another buying opportunity to top up a bit.

Have a look at this thread and read the CityWire article referenced within it.

https://forums.moneysavingexpert.com/discussion/6390072/confused-about-discount-rates-in-infrastructure-funds#latest

bostonerimus

Albermarle said:

bostonerimus said:

If they have any borrowing it just got more expensive. I've never understood why people are interested in such focussed and risky investments as part of their portfolio.

Diversification .

I'd get that with a diversified fund, not a targeted one...seems like a bet on a single sector rather than diversification. But I see some tough times ahead for any entity that uses leverage ie borrowing, be it a closed end fund or someone looking for a mortgage or a car loan.

Albermarle

bostonerimus said:

Albermarle said:

bostonerimus said:

If they have any borrowing it just got more expensive. I've never understood why people are interested in such focussed and risky investments as part of their portfolio.

Diversification .

I'd get that with a diversified fund, not a targeted one...seems like a bet on a single sector rather than diversification. But I see some tough times ahead for any entity that uses leverage ie borrowing, be it a closed end fund or someone looking for a mortgage or a car loan.

Yes OK, I meant investing in infrastructure and renewables generally is a good diversifier from the usual.
However probably better not to buy single funds focused in a very narrow sector as yoiu say.

Heedtheadvice

Just to comment for Bostonerimus.

I agree that such investment in themselves as Gore street are not diversified ( although the portfolio of their assets is geographically diversified ) being a single sector and effectively a single company trust.

Within a personal portfolio it can add diversification such as when a portfolio is made up of individual company shares. I my case the vast majority is invested in diversified funds and trusts. Only a small fraction is single company shares so not a great risk to the portfolio.

There are not that many trusts that are ESG and invest in green energy or renewables and in particular the storage part of that sector......as far as I know......I desire investment in that area much like I see purchase of solar panels both good for us, my finances and a longer term ' investment '.

I must be missing something as like HICL discussed in the above link, Gore Street are recorded by AIC data as having no gearing and they are cash ( or equivalent) rich.

The only things that strike me are the current investment climate and invester confidence, the rising interest rates (especially recently) approaching the divi rate and the life of the storage assets.

Would love more comment as the latter limited asset life will be true but value as we go more green should increase too? Possibly not outwaying or balancing the risks?

Martico

bostonerimus said:

II've never understood why people are interested in such focussed and risky investments as part of their portfolio.

I've got my S&S ISA with Clim8 Invest, which is clearly very focused on fixed income bonds and equities that are actively seeking to address climate change. It is definitely riskier than a broader portfolio, but I believe in the mission and want my money to be in companies that I think are working to make a positive difference. It's held up pretty well this year so far for me, still in positive overall territory since I started investing six months or so ago. It's not a large investment by any stretch, but I'm comfortable with it.

(Edit: just checked, Gore Street is one of the equities held in the ISA)

bostonerimus

Albermarle said:

bostonerimus said:

Albermarle said:

bostonerimus said:

If they have any borrowing it just got more expensive. I've never understood why people are interested in such focussed and risky investments as part of their portfolio.

Diversification .

I'd get that with a diversified fund, not a targeted one...seems like a bet on a single sector rather than diversification. But I see some tough times ahead for any entity that uses leverage ie borrowing, be it a closed end fund or someone looking for a mortgage or a car loan.

Yes OK, I meant investing in infrastructure and renewables generally is a good diversifier from the usual.
However probably better not to buy single funds focused in a very narrow sector as yoiu say.

Can't argue with that ;-)