Investment Strategy

Investment Strategy

The Fund will finance Renewable Energy & Energy Efficiency projects offering first mover advantage and a plethora of opportunities such as district heating and co-generation for communities of 15-50k residents, Public lighting, Energy Efficiency for Italian Industrial companies and possibly investments in hydroelectric plants.

The lending will be achieved by direct origination of Green-Bonds, which will be listed on the Italian stock exchange. The Green-Bonds are fully amortising, senior secured and once the projects are operational, they also are eligible for Investment Grade rating.

When compared to corporate lending, the Fund’s financing structures have key benefits, including:

Tight control of project cash flows

Origination of fully amortising bonds, thus reducing risk through time.

Highly transparent

With clear senior secured creditor status and control over major project contracts.

Pre-defined risks

With the ability to place the risk with the party best able to manage it.

Single purpose or limited scope companies

With ring fencing.

Through management of construction risk. Greenfield projects are not usually rated, but can obtain investment grade rating post construction and once an operating track record is established.

The Fund is a 7 years life closed end vehicle but its underlying assets have a longer maturity, therefore we have envisaged an exit strategy for the entire portfolio.

We have analysed four viable exits:

Portfolio Sale

Institutional investors are seeking high quality, reliable income streams as opposed to fixed income portfolios with increasing interest rate risk. Investors with an allocation to ‘Alternative Investments’ are generally reducing their exposure to hedge funds after years of underperformance and to many mature real estate markets and increasing their exposure to safer, lower volatility infrastructure investments.

Securitisation

Securitisation volumes have recovered following the credit crisis and more non-plain-vanilla securitisations are being sponsored. Green Bonds are increasing in volume; their social responsible characteristics and long dated tenors are attractive to investors. Diversified sector exposure, backed by a reliable long-term income stream, ensure a successful underwriting at exit.

Secondary Market

Growth expectations for the Italian Green-Bond market are high due to the hindering of commercial bank lending by the recession and by strict regulatory capital requirements (Solvency II and Basel III). The listing on Borsa Italiana standardised the pricing mechanism of Green-Bonds and improved liquidity.

Fund IPO

In 2013, Foresight Solar Fund Limited (FSFL) raised £150m at IPO, the largest on the LSE at that time. FSFL has since raised a further £132m under its Placing Programme. FSFL is comprised of fully operational assets and targets a 6% inflation linked annual dividend. Foresight believes a similar listing could be achieved for the Green Bond Fund.

Contact us to find out more about the Italian Green Bond Fund

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Restricted Disclaimer

Disclaimer:

This website has been issued and approved as a financial promotion by Foresight Group LLP, which is authorised and regulated by the Financial Conduct Authority. This area of the website is intended only for institutional investors that are regulated by the Financial Conduct Authority (“FCA”).  If you are not an institutional investor, please do not proceed any further and instead click here to access our retail section of the website.

This website relates investments in the Foresight Italian Green Bond Fund, which is an institutional  fund structured as a Luxembourg SICAV. The opportunity set out in this website may not be appropriate for all investors and an investment should only be made on the basis of the Investment Memorandum dated December 2017.  We recommend that you seek professional advice before making an investment.

Risk factors

You should consider the full risk factors that appear in the Investment Memorandum, dated December 2017, before making a decision to invest. The Foresight Italian Green Bond Fund is a high risk investment.  Below are some of the key risks that apply to this fund:

This website is intended for discussion purposes only and does not create any legally binding obligations on the part of Foresight Group LLP.

Without limitation, this website does not constitute an offer, an invitation to offer or a recommendation to enter into any transaction. The information contained in this website is confidential in respect of which we are under obligations of confidentiality to third parties and is also of a commercially sensitive nature and should not be reproduced, disclosed, distributed to or used by any other person.  We would therefore respectfully require that this information should only be used for the purpose of evaluating our proposal and should not be disclosed to any other person, firm or company without our prior written consent. We would further request that after receiving any request for the provision of any such information under the Freedom of Information Act 2000 or any other statutory or regulatory provision you would consult with us as soon as possible.

Foresight Group LLP has taken all reasonable care to ensure that the facts stated in this website are true and accurate in all material respects and that there are no other material facts the omission of which would make misleading any statement in this website.

Assumptions, estimates and opinions contained in this document constitute our judgment as of the date of the document and are subject to change without notice. Any forward looking statements or projections are based on a number or assumptions as to market conditions and there can be no guarantee that any projected results will be achieved. Past performance is not a guarantee of future results.