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BSIF Bluefield Solar Income Fund Limited

104.80
0.40 (0.38%)
Last Updated: 09:45:21
Delayed by 15 minutes
Bluefield Solar Income Investors - BSIF

Bluefield Solar Income Investors - BSIF

Share Name Share Symbol Market Stock Type
Bluefield Solar Income Fund Limited BSIF London Ordinary Share
  Price Change Price Change % Share Price Last Trade
0.40 0.38% 104.80 09:45:21
Open Price Low Price High Price Close Price Previous Close
104.60 104.40 105.20 104.40
more quote information »
Industry Sector
EQUITY INVESTMENT INSTRUMENTS

Top Investor Posts

Top Posts
Posted at 22/4/2024 23:22 by masurenguy
Bluefield Solar Income Fund: dividends whatever the weather

Dividends are covered by high levels of regulated, index-linked revenues alongside contracted power sales. Last year, 836,232 MW hours of energy were generated, of which just over 700,000 MWh was from solar. Payments for this electricity amounted to £108m of operational cash flows, minus £18m to service debt, percolated through to £90m of distributable earnings – more than twice covering dividends. So even after paying out dividends, a £58m dividend surplus was carried forward, giving investors extra peace of mind. Funds like Bluefield Solar paid highly attractive, progressive dividends for the first 7 or 8 years after BSIF and its peers floated, with average wholesale prices between £45 to £55 per MWh. Wholesale prices spiked above £500/MWh in 2022 and last December fell back below £100 – but that’s still almost double what the average has been in the previous decade. So to people worrying about how the funds will continue to pay dividends, Armstrong says: “the reality is these funds work very well and can operate very attractively on lower power prices than we currently see.”
Posted at 21/4/2024 09:16 by masurenguy
AJ Bell’s fair value assessment of Bluefield Solar misses the mark
We assess the report from 360 Fund Insight that is preventing private investors from buying Bluefield Solar Income on AJ Bell, and find it wanting.

AJ Bell’s outsourced assessment by value provider 360 Fund Insight of Bluefield Solar Income Fund (BSIF) has concluded the strategy is not appropriate for private investors because it has ‘worrisome’ borrowing levels and an ‘aggressive’ dividend policy. In the two-page document shown to Citywire, 360 demonstrates a misunderstanding of what Bluefield does by comparing its portfolio of UK solar, wind and battery storage assets with WilderHill New Energy Global Innovation index, made up of shares in global renewable energy companies, and an exchange-traded fund (ETF) that tracks it.

Holding shares in a portfolio of actual assets delivering largely inflation-linked, government-backed revenues that offer income investors a dependable yield is a different investment proposition to having shares in a portfolio of more than 100 global energy companies. It’s not comparing like for like. 360’s declaration that BSIF’s 8.80p-per-share dividend is ‘aggressive’ is at odds with its observation that the fund’s forward revenues from the inflation-linked contracts cover it twice over. Perhaps the ‘aggressive’ bit is the 9% yield, which is a result of a high payout and a low share price, but that’s what makes BSIF so attractive at the current 27% discount to net asset value (NAV) and why investors are annoyed that 360’s report has prevented them from buying the investment company on AJ Bell.

In Bluefield’s own recently published assessment of value, it says the main purpose of the £601m fund is to provide shareholders with an attractive return ‘principally in the form of regular income distributions’. By contrast, the ETF reinvests dividends it receives and only offers an ‘accumulation’ or growth share class to investors. 360 flags BSIF’s borrowing of 41.5% of gross assets as ‘worrisome’ given the dividend policy and elevated interest rates. But this is within the fund limits and is the sector average, and the board has pointed out in recent documents that at a 3.5% fixed rate, it’s pretty cheap. Emphasising the high leverage by pointing to the Invesco ETF’s zero borrowing is a straw man argument given ETFs are passive and can’t use gearing. Lastly, 360 says Bluefield’s factsheets distributed to retail investors do not provide key data, such as the total cost of investing, performance and the discount/premium evolution.

The Kent-based company, which was founded in 2017 by former members of the investment research team at funds platform Allfunds Bank, says it bore in mind that Bluefield is distributed to retail investors with ‘limited knowledge of the risks of investment trusts’, which is laudable. It makes good points that trusts are not held to the same reporting standards as open-ended peers and that several factors can impact a shareholder’s returns, including ‘leverage, liquidity, opaque costs and charges’. It also points out that BSIF’s ongoing charges total 1.94% versus 0.6% for the ETF. Bluefield portfolio manager James Armstrong told Citywire he was very surprised and disappointed to learn through investor feedback that 360’s assessment suggests BSIF does not offer fair value. "Since AJ Bell’s announcement to investors, the BSIF share price has fallen, trading away from BSIF has increased, and many frustrated investors continue to contact Ocorian, BSIF’s company secretary, expressing their confusion over the suggestion that BSIF does not offer fair value. They have also been frustrated by an inability to trade on the AJ Bell platform as a result." he said

The tone of the assessment is set when 360 makes the contentious claim in its opening statement that professional investors are better suited to closed-end funds in general. That appears to be a strange comment on behalf of AJ Bell, a retail broker with thousands of customers invested in trusts. The assessment rightly sets out to ensure retail investors aren’t hoodwinked by hidden costs, ‘misleading’ NAV returns and borrowing levels, but it misses the mark. Unfortunately, there are wider consequences with 360’s fair value assessments. AJ Bell’s DIY investors are barred from buying any shares online, not only in BSIF but also in Cordiant Digital Infrastructure (CORD) and Amedeo Air Four Plus (AA4), which have failed the assessments. Shares can still be bought over the phone though. In January, 360 won the contract to provide fair value assessments for thousands of funds on AJ Bell, including all offshore-domiciled investment companies.

AJ Bell said: "The assessments consider a range of factors, including cost and performance, in line with regulatory guidance. As with all our processes, [they] will be reviewed periodically and we’ll continue to listen to feedback from customers, regulators and other stakeholders."
Posted at 12/4/2024 08:19 by 18bt
AJ Bell blunders deepen row over ‘fair value’ restrictions on trusts
Outcry over retail brokers restricting investors from buying out-of-favour investment companies intensifies after AJ Bell implements FCA consumer duty regulations.
Jamie Colvin
By Jamie Colvin

AJ Bell has added to the outcry over retail brokers restricting investors from buying out-of-favour investment companies on the grounds that they are poor value.

The share-dealing platform has confirmed to Citywire that Chrysalis Investments (CHRY) and Bluefield Solar Income (BSIF) were among listed funds where online trading had been stopped after they failed fair value assessments conducted on behalf of the broker.

However, a spokesperson said investors could phone through a transaction and still pay the online charge of £5 rather than the normal phone fee of £25.

On online forums customers of AJ Bell complained they had also been prevented from buying Digital 9 Infrastructure (DGI9), Cordiant Digital Infrastructure (CORD) and Amedeo Air Four Plus (AA4) for failing the fair value assessment carried out by external consultant 360 Fund Insight.

Investors are furious they are being prevented from buying closed-end funds trading on wide discounts that they regard as good value with their low share prices offsetting any potential concerns over performance and costs.

Tom Poynton of wealth manager Baron & Grant said: ‘They’re acting as DIY investment supermarkets and supermarkets don’t tell you what you can and can’t buy otherwise everybody would only every buy own-branded and the cheapest goods. When those investors are told they can’t, they become disgruntled and there’s a chance that they’ll vote for their feet.’

There is also concern that the fair value notices are encouraging investors to sell these companies, putting further pressure on their share prices.

AJ Bell apologised after contacting investors who did not hold the restricted funds or informing others that the investment companies had completed the fair value assessments when they had been done by 360.

The confusion was heightened as all of the above investment companies are based in the Channel Islands and are not required to provide the assessments.

‘Notifications were issued following fair value assessments and unfortunately in some cases administrative errors resulted in customers receiving incorrect messages,’ AJ Bell told Citywire.

Under the Financial Conduct Authority’s consumer duty regulation, share-dealing platforms say they are required to alert customers at risk of poor returns and help them make informed decisions.

Price, performance, leverage and liquidity are all factors in whether investment companies are regarded as fair value.

AJ Bell says it monitors funds through the assessments and if they have not completed one, outsources the requirement to 360.

Its move follows similar restrictions by other investment platforms.

Hargreaves Lansdown has also restricted investors from buying Digital 9 Infrastructure, Cordiant Digital and Amedeo Air Four Plus until they pass a questionnaire showing they have the understanding of ‘complex investments’.

While Cordiant and Amedeo are listed on the London Stock Exchange’s specialist fund segment, Digital 9 is not but is still viewed as ‘complex’;.

‘These questionnaires aim to protect clients from poor outcomes, and so provide information on the product type, including some of the associated risks, before testing whether the client has an appropriate level of knowledge and experience,’ Hargreaves told Citywire.

AJ Bell also requires investors to complete an online ‘appropriateness assessment’.

‘It’s sheer stupidity that I can buy a hopeless share at big risk of going bust like Superdry, but can’t buy a pooled investment like DG19 without this farcical test. Pointing out that I was a very experienced investor in investment trusts fell on deaf ears,’ said one bulletin board member who failed Hargreaves’ questionnaire.

As previously reported, Fidelity’s platform bars purchases in AVI Global (AGT), MIGO Opportunities (MIGO), RIT Capital Partners (RCP) and Abrdn Private Equity Opportunities (APEO) although existing investors are allowed to top up their positions.

Interactive Investor also requires investors to certify they understand the risk of more complicated investment companies, including Digital 9, before allowing investment.

Poynton added: ‘I do sympathise with the platforms. They are trying to interpret what their role is in this. Some investment trusts are designating themselves as complex and the platforms can take it upon themselves to do so, then insist on investors taking a test. But what’s an appropriate test? What expertise is needed?’
Posted at 25/3/2024 18:46 by gateside
My wife holds BSIF in her Sipp with AJ Bell, and she got the emails that others got. I hold BSIF in my Interactive Investor ISA and there was nothing from them. Suggests that AJ Bell have made a real mess of their communication
Posted at 02/3/2024 13:53 by masurenguy
Bluefield Solar targets share discount with £20m buyback round

Bluefield Solar Income Fund has allocated £20m to a share buyback programme to narrow the discount between the share price and its asset value. Chair John Scott also bemoaned the lacklustre performance of the group’s shares. “No matter how brightly the sun shines nor however hard the wind blows, our share price is becalmed at levels which are significantly below net asset value,” he stated.

As of 31 December, the discount to NAV was 14%, while it widened to as much as 25% throughout the period. Though this has little tangible effect on dividends, Scott said it “constrains our ability to raise the new equity capital needed to fund our further development… It also acts to the detriment of shareholders who wish to exit and who have been facing a discount of more than 25% to the underlying value of their investment”. Bluefield Solar’s share price discount suggests a “serious disconnect” between “how the company is valued by public markets and the prices being paid by institutional investors for portfolios of solar PV and wind assets”, he added.

The trust reported a net asset value (NAV) of £831.3m as of December 31, slightly down from £854.2m on June 30, 2023. Underlying earnings saw a 14.5% decrease to £43.9m. The dividend target for the fiscal year has been set at no less than 8.8p per share at two-times cover, up from 8.6p in the previous fiscal year. Operational milestones during the period included the signing of a Memorandum of Understanding (MOU) with GLIL Infrastructure, it said, marking a strategic partnership poised to fortify Bluefield Solar's investment and operational capabilities. Planning consents were also received for 137MW of solar projects and 90MW of battery projects, with the pipeline expanding to approximately 968MW of solar and 563MW of battery storage​.
Posted at 28/2/2024 10:13 by melody9999
Hi Nerja -

I used to work in the sector on the opertional side - getting connections through the DNO's was always time consuming - but BSIF will be on top of that.

There is quite a lot in the results - I copied these that may be of interest:

Although spot power prices have softened recently, BSIF was the beneficiary of our Investment Adviser's strategy of fixing prices up to 36 months in advance, with the result that, despite irradiation levels some 13% below those experienced in the second half of calendar 2022, our revenues for the Period grew as compared with the previous year.

Our ability to convert this pipeline into electricity generating assets is significantly restricted by current conditions in the capital markets, which make it difficult for us - and most participants in the renewable energy sector - to raise additional equity. In response to this constraint, the Company has entered into a Strategic Partnership with GLIL Infrastructure ("GLIL"), covered in more detail below.

There is ample transactional evidence of asset values consistent with our latest Directors' Valuation of nearly 136pps, so to see the Company's shares trading at close to £1 per share suggests a serious disconnect between how BSIF is valued by public markets and the prices being paid by institutional investors for portfolios of solar PV and wind assets.
Posted at 11/1/2024 10:42 by the deacon
Proactive Investors interview this morning:https://youtu.be/l-5GV0U7x5U?si=sakCOCNYkTyuizSJ
Posted at 22/12/2023 07:35 by 18bt
There are always some interesting announcements on the last, short trading day before Christmas and Bluefield has one. My initial reaction is that they are delveraging around current NAV and securing a long term financing partner. So it can continue to grow in the long term at the short term cost of selling some assets. However, they are deleveraging at a point when the interest rate cycle seems to have peaked. There is little mentioned of whether the company benefits from any of the maintenance cost defrayment - I suspect not - cynically, I wonder whether Bluefield Partners is a bigger winnner. But I think the market (and me) will applaud the company and Board for proactively trying to solve the problem that was thrown at them. There are too many others out there doing nothing. Merry Christmas all BSIF investors.
Posted at 05/9/2023 14:18 by masurenguy
"Bluefield Solar Income (BSIF) has a 10-year track record of producing an average underlying total return from net assets of more than 10%, the second highest in the sector after Greencoat UK Wind (UKW). BSIF shares offer investors a prospective yield of 7.4% and discount of 17.6%. BSIF was also one of very few renewable energy funds to announce an uplift in its NAV at 30 June. That NAV uplift came despite a 0.75% increase in the discount rate used to work out the net present value of BSIF’s future cash flows. BSIF is now using a weighted average discount rate of 8%, which looks sensible to me relative to yields of about 4.6% on 30-year UK government bonds.

For the financial year to 30 June, BSIF aimed to generate 8.4p in total dividends per share, and with three quarterly payouts declared it is a safe bet the target will be met. Moreover, the company expects the dividend will be covered twice by earnings after servicing its debt, with substantial earnings growth to follow over the next two years. This is not the sort of confident statement that companies make lightly. When BSIF announces its results at the end of September, it may turn out that this dividend cover estimate will be conservative. BSIF has been able to achieve this by locking in some of the higher power prices that we saw earlier, which gives its board good visibility on BSIF’s future cash flows.

Higher-than-expected inflation is a net positive as this feeds through into the subsidy income BSIF earns. Another feather in BSIF’s cap was locking in low interest rates through an interest rate swap. Apart from the actual level of dividend cover, one other key message in the results will be the board’s new dividend target for the current financial year. In recent years, BSIF has hiked its dividend by about 2.5% a year on average. The high level of dividend cover for the June 2023 financial year might encourage the board towards a bigger increase this time or it might choose to use the surplus cashflow to help fund the company’s sizeable investment pipeline.

At the end of March 2023, BSIF had about 390MW of solar and 125MW of energy storage in construction-ready projects. Building projects can enhance NAV as they are revalued upwards once they are completed and energised and therefore substantially de-risked. Beyond that, BSIF also had solar projects in planning and substantially more solar and energy storage projects in development."
James Carthew: Citywire: 4 Sept 2023.
Posted at 04/9/2023 14:21 by 18bt
Below from a Citywire article on renewables today:

BSIF’s good record

The contrast with the next-higher yielding fund, Bluefield Solar Income (BSIF) could not be greater. BSIF has a 10-year track record of producing an average underlying total return from net assets of more than 10%, the second highest in the sector after Greencoat UK Wind (UKW).

BSIF shares offer investors a prospective yield of 7.4% and discount of 17.6%. BSIF was also one of very few renewable energy funds to announce an uplift in its NAV at 30 June. That NAV uplift came despite a 0.75% increase in the discount rate used to work out the net present value of BSIF’s future cash flows. BSIF is now using a weighted average discount rate of 8%, which looks sensible to me relative to yields of about 4.6% on 30-year UK government bonds.

For the financial year to 30 June, BSIF aimed to generate 8.4p in total dividends per share, and with three quarterly payouts declared it is a safe bet the target will be met. Moreover, the company expects the dividend will be covered twice by earnings after servicing its debt, with substantial earnings growth to follow over the next two years. This is not the sort of confident statement that companies make lightly.

When BSIF announces its results at the end of September, it may turn out that this dividend cover estimate will be conservative. BSIF has been able to achieve this by locking in some of the higher power prices that we saw earlier this year and last, which gives its board good visibility on BSIF’s future cash flows.

Higher-than-expected inflation is a net positive too, as this feeds through into the subsidy income BSIF earns. Another feather in BSIF’s cap was locking in low interest rates through an interest rate swap.

Apart from the actual level of dividend cover, one other key message in the results will be the board’s new dividend target for the current financial year. In recent years, BSIF has hiked its dividend by about 2.5% a year on average. The high level of dividend cover for the June 2023 financial year might encourage the board towards a bigger increase this time or it might choose to use the surplus cashflow to help fund the company’s sizeable investment pipeline.

At the end of March 2023, BSIF had about 390MW of solar and 125MW of energy storage in construction-ready projects. Building projects can enhance NAV as they are revalued upwards once they are completed and energised and therefore substantially de-risked. Beyond that, BSIF also had solar projects in planning and substantially more solar and energy storage projects in development.

If dividend yield is the main attraction of these three renewable energy funds, it clearly does not make sense that the one with the longest track record, highest dividend cover and good prospects is trading on the highest yield.

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