Aquila Energy Efficiency Share Discussion Threads

[cynicalsteve] 28/3/2022 16:45

Some fund managers do something called 'window dressing' as the end of their financial year approaches. They sell shares that have done badly and buy ones that have done well. When investors read the annual report they see a portfolio full of winners!
If this is the cause the share price should stop falling next month, assuming a 31st of March year end.

[boystown] 28/3/2022 16:32

Out of interest CC2014 - why is the discount here so surprising as loads of ITs are at similar discounts? Is it because it's in such an obvious growth area?

[jonwig] 28/3/2022 14:50

An earlier suggestion you made, that a determined seller is at work, still seems quite likely. The real sells seem well-flagged: large blocks and on the bid. Smaller buys are still below half way.

[cc2014] 28/3/2022 14:06

I have added to my position 3 times today including the trade at 72.95p.

I've got enough for now.

A 25% discount to NAV is just odd.

I'm not sure how the Board can just watch the share price collapse and say nothing.

Either there is market senstitive information which has leaked explaining the fall which they need to RNS or there is nothing of concern in which case they should issue an RNS saying so.


Edit: there's either something fundamentally gone wrong here in which case the share price is going to continue to fall or otherwise this is easy money.

I shall wait until the discount goes out to 30% before buying any more. (perhaps)

[brwo349] 28/3/2022 11:10

There is no end in sight to this
You can now buy at under 74p

[cc2014] 25/3/2022 15:49

It's a puzzle that's for sure. My kids are now the proud owners of AEET in their LISA's at 74.9p. The good news for them is that this is their first purchase of AEET, unlike me who started at the IPO.

[jonwig] 25/3/2022 15:32

brwo - no, any authority to buy back shares would need to be approved at a shareholder meeting (eg. AGM) which they haven't had yet.
I doubt many shareholders would want that option.

steve - I'm not overweight here, but there should be a significant cash return at this level. The review was announced on 31 Jan, so a decision is well overdue.

[cynicalsteve] 25/3/2022 15:14

I've just got 3100 at 75p. I would get more but I'm already hugely overweight in this. Surely they have to be a bargain at this level? My theory is that the market now values AEET as a 'special situation' stock rather than a safe income stock. New investors are buying from disillusioned old investors but are doing so at a price that gives them the prospect of big profits.

[brwo349] 25/3/2022 13:44

Do they have a buyback authority?
There is no point in buying anything other than their own shares at this level.

[cynicalsteve] 25/3/2022 11:00

SDCL ENERGY EFFICIENCY INCOME TRUST PLC (SEIT) has over £900m of assets and just raised another £100m in a placing of new shares at a premium of about 10% to NAV. AEET has less than £100m of assets and no prospect of raising new capital, it has no future in its current form, it is the investment equivalent of the Monty Python 'Dead Parrot Sketch'. It might be able to continue as a fund of funds where its small size could be an advantage but more likely it will merge with another trust.

[cc2014] 24/3/2022 12:09

Someone wants out for sure. The trades look to me like the seller is going through It falls again. Whoever was wating for 75p it won't be long now...

[cc2014] 22/3/2022 11:16

#59. I agree. That's a very simple way to resolve the problem and must be one of the options being considered.

My puzzle is though that it's now 7 weeks since they started this strategic review and that already seems a few weeks too long to draw the report to a conclusion.

It's the nature of these things that the outcome leaks and the share price tends to move in advance.

In our case the movement in share price is still downward. Indeed I suspect most of the share deals are PI's picking up what we perceive as cheap stock. Certainly a few have been mine.

It is possible the institutions aren't interested because the market cap is now significantly below £100m, but what is clear that the volume a few PI's are buying is less than the volume coming on the market. This is always a circular problem of course. If you think you can buy it tomorrow cheaper than you can buy it today, even if you consider the price to be excellent, you aren't in a hurry to buy.


What I can work out is the following:
1. If AEET merges with AERS, we likely get a merger at 97p a share, giving a 26% upside in the 3 months it takes to do the transaction

2. If AEET is wound up we get around 84p within 3 months and around another 11p within about a year allowing for some costs to wind it up. Still around 23% in a year but with most of the cash coming in earlier.

3. If AEET decides to continue as is without or without a wider investment policy it will take another year to deploy the assets fully. At that point the NAV will still be around 97p as I'm broadly saying the income will equal the management fee, but no dividend will have been earnt. From that point forward the dividend will be probably around 4% and ramping up to reflect a NAV return of 7-8%. It then looks like any other renewable trust and will over time get back to NAV and churn the dividends out.

I can't see any other options being agreed to by shareholders, unless the Board are considering removing the fund manager, which when I think about it would be a valid discussion. I would have to read the prospectus about whether Aquila can be kicked out at the first AGM and whether unfilled non-exec posts would impact this.

[jonwig] 22/3/2022 07:00

The simplest solution might be a merger with AERS. The two aren't so different, but shareholders of both would need to vote it through. AEET shareholders would need to approve change to a simpler 'infrastructure' mandate.

Normally these things are done on the basis of NAVs, and the only numbers I have are AEET 96.92p (on 31/12) and AERS 99.4c on 30/06 (= 83.18p at current forex) so that could become:

1 share in AERS = 1 share in Newco,
1 share in AEET = 1.165 shares in Newco.

NB. AERS is trading around par.

[brwo349] 21/3/2022 19:35

I don't see how this trust can continue. They'd have to justify their inaction. They've cost shareholders a year of income which is £5 million so unless they can prove the cost of buying their target assets are now 5% cheaper they don't have a leg to stand on.

[cc2014] 21/3/2022 08:34

Options are;

1. Wind up Trust. Would give shareholders an exit at say 95p in time and after expenses but hard to see Aquila wanting to do that as they lose their fee
2. Broadening investment policy to become more of a mainstream renewable trust. I don't think investors would object to this but I'm not sure this would necessarily speed up investment.
3. Merge with another Aquila fund. This is possible. Could include a cash exit option
4. Keep Trust as is but committ to sorting out slow investment. Possible but would require imho a bit of a shake-up of the management team and/or Board who seem to have too many roles.


My guess is that by the time the review concludes AEET will have somehow magically speeded up the investments and around 25-30% of the cash will be committed and they will recommending continuting as is. Waiving the first years management fee would be helpful.

[jonwig] 21/3/2022 08:26

Buying at 77.5p now. (Mine was 77p.)

Their sister company, AERS, seems to have made a number of investments but has been pretty lacklustre.

[brwo349] 18/3/2022 20:22

The more I think about this the more I'm convinced this trust is finished as an independent entity. It will either be absorbed by another aquila trust or will be liquidated. They have blown it big time because confidence has been shot to pieces. This trust should be trading close to net asset value if things had gone to plan. It will never recover from this. The result of the review will confirm it's game over.

[cc2014] 18/3/2022 16:07

After an hours research I have discovered more is committed than is first apparent.

1. RNS say euro 0.3m is committed to Lumenstream but this article suggests £5m is on the way. It is 11 days old


2. Then we have the Noleggio Energia which again talks about a partnership. From the RNS: "The partnership has resulted in securing financing for two projects, which have been implemented, and we expect to finance additional projects, one of which has already been approved by the Board." ffs why can't they tell us what it actually is or just give us the amount.

The way I'm reading this is that what Aquila is doing is setting up partnerships and the projects will flow over time, but are currently going far too slowly.


More on Lumenstream. "Following its launch in 2019, LUMENSTREAM upgrades commercial buildings to LED lighting with sensor controls for no upfront capital cost. This enables companies to save up to 85% on their lighting costs while dramatically reducing their carbon emissions and removing maintenance requirements for the contract duration.

A fraction of the energy saving is then paid to LUMENSTREAM as a monthly subscription fee for the initial five years, meaning its customers generate positive net cash flow immediately following project upgrade."

Er, so Lumenstream put in a PIR and the lights switch off when no-one is around, Aquila finance it and they take a cut of the savings. Seems like easy money to me, because PIR's cost peanuts (I'm probably exaggerating here but I'm sure my point is made).

[jonwig] 18/3/2022 12:47

CC2014 - if you could buy at 76.5p, it looks like the 76.0p trades will be sells, so the true spread is quite tight. It's possible the price is depressed by knowledge that there's a tap waiting once the price recovers.

I'm still mulling this over!

[jonwig] 18/3/2022 12:42

The RNS list is here:



Major holders appear to be -

Investec 25%, Aquila Capital 13%, Schroders 12%, Marmarkon 6%, Stichting Juridisch Eigendom Privium Sustainable Impact Fund 6%, Bradford Council Pensions 5%.

[brwo349] 18/3/2022 12:22

Do you know who the major shareholders are? I cannot find a list.

[cc2014] 18/3/2022 11:29

I've spent most of the morning considering the situation and I've bought some more at 76.5p

The share price just seems wrong to me.

[cc2014] 18/3/2022 09:48

So, what's puzzling me more than anything is why
a) the cash hasn't been deployed
b) why Aquila Capital aren't sorting this out on an immediate basis.

Extracts from Wikipedia.

Aquila Capital is an investment management company with headquarters in Hamburg, Germany.[1][2][3] It was founded in 2001 and focuses on sustainable investments,[4] including renewable energy and green logistics, as well as real estate.[5] Aquila Capital manages more than €12.5 billion for institutional investors and is among Europe’s leading investment companies in clean energy.[6][7]

Aquila Capital has invested more than three billion euros in solar assets and more than two billion in wind assets


AEET is a fund of £100m. It's absolutely tiny compared with Aquila's AUM of £10b

Even if the fund is the biggest screw-up in history, Aquila just pull 5 people off other projects for a month and they could sort it.

Or maybe that's the problem. It's just so small Aquila management haven't paid any attention to it at all and still aren't.

[cc2014] 18/3/2022 08:54

What to do though? Every day the prices seems to fall half a penny and thus creating a greater and greater discout to NAV which the market seems to have no inclination to act on.

My normal strategy would be to keep buying as the price appears to become more and more perverse but I've reached the point where I now have to be careful before adding any more.

[brwo349] 18/3/2022 08:06

on offer now at 76.5p. Yikes.