Bluefield Solar Income Share Discussion Threads

[masurenguy] 22/7/2024 08:52

Yield at todays shareprice is 8.1%

Update on major institutional shareholders.

BlackRock Investment Management: 73.48m. 12.19%
Valu-Trac Investment Management: 36.09m. 5.99%
LGT Wealth Management UK: 30.20m. 5.01%
Newton Investment Management: 29.97m. 4.97%
CCLA Investment Management: 29.61m. 4.91%

Top 5 hold circa 33%.

[masurenguy] 19/7/2024 13:22

Bluefield Solar Income Fund

Over in the FTSE 250 renewable energy infrastructure funds offer some of the best yields, including the £653m Bluefield Solar Income Fund. The fund has a £816m portfolio of solar and wind energy assets throughout Britain, from which it aims to generate long-term, stable dividends. Most of its assets, which together have a peak capacity of 834 megawatts, are based in England, with 14%in Wiltshire. Its shares have been in steady decline since May 2023 and are down by 7% in the past year. As a result, it trades at a wide 19% discount to its net asset value, broadly in line with an average 22.6% discount across investment companies that specialise in renewable energy infrastructure. Bulls are hoping that possible interest rate cuts this year should help this ratio to move closer to par.

Renewable funds have long-duration cashflows, as much of their revenues are derived from long-term government-backed projects. Lower rates translate into lower discount rates, a metric used to convert future cashflows into an equivalent present value. This should help to increase the NAV of renewable funds. That said, the main draw of Bluefield Solar Income is its income. It is targeting a dividend of 8.8p per share for its financial year to the end of March, which is expected to be covered by roughly two times earnings. This implies a forward yield of about 8%. The shares are likely to remain volatile, especially as expectations over rate cuts continue to change, but chunky payouts mean the fund has delivered a total return (that is the share price return with dividends reinvested) of 11% in the past five years, making it the best-performing solar fund on the London market. This is modest compared with a 23% return from the FTSE 250, but for investors seeking greener income, Bluefield looks attractive.

Advice: Buy

[the modeller] 10/7/2024 21:54

Cheaper power from overseas interconnectors and new domestic generation is depressing spot power prices, and the longer-term PPA landscape is naturally appreciably bleaker:https://tradingeconomics.com/united-kingdom/electricity-priceWrt Great British Energy, given the forward power curves I am circumspect about private capital s appetite - unless HMG gives much more support through CfDs? IMV Labour will not materially change the terms, they are currently intoxicated on power (apologies) but they will sober up. When they land they will freely accept that they have to manage debt in order to remain in Westminster showbiz.

[masurenguy] 09/7/2024 13:34

Here’s hoping Labour’s new energy drive can help re-rate renewable infrastructure funds which offer good income and growth but trade on excessive share price discounts.

The new government has ambitious-sounding targets to quadruple offshore wind capacity, treble solar capacity, and double onshore wind capacity over the next decade. The big question is how this will be financed. Labour is creating a new entity, Great British Energy, which it will back with £8.3bn of funding over the lifetime of the current parliament. It isn’t clear what it will do but the rhetoric suggests that it will use its funds to help de-risk and kickstart projects so that they can attract much higher levels of private capital. That suggests that there will be an important role for the listed renewable energy infrastructure sector, if it can find ways to raise fresh capital or recycle the capital it already has.

[tournesol] 05/7/2024 09:24

Lot of talk about Labour's green energy and green growth plans and about planning reform. I'm not across the details but must be implications for BSIF. Presumably positive.

[stocksnerd] 10/6/2024 08:25

This fund is featured in the 24th May edition of Money week where it has a 3/4 page spread on page 36.

It is said to be trading at 21% below NAV with an 8% dividend. The company is also currently buying back shares and it has just recorded it's best ever set of results.

Money Week says that the Fund may be 'unsuitable' for private investors because of it's worrisome debt levels and it's aggressive dividend policy.

Money Week's conclusion is that it is an excellent investment opportunity and says that investors could earn a very healthy return over time and if the fund continues to keep booking record returs, then a private equity firm could come knocking.

I've just dipped my toe in.

[brassgemini] 31/5/2024 10:19

Dear Mr xxxxxx, Price and value have been highlighted by the UK's financial regulator as key factors in delivering good outcomes for customers. As an investment platform, we therefore regularly review investment manufacturers' own assessment of the value they provide to customers. These assessments are called 'fair value assessments'.Certain fund managers or investment companies on our platform are not required to produce a fair value assessment, but it's still important that we understand the value they provide. Therefore, we've used analysis carried out by an independent third-party 360 Fund Insight to help us understand if value is being provided.We recently emailed you about a fair value assessment which was carried out by 360 Fund Insight on an investment you hold: BLUEFIELD SOLAR INCOME FUND LTD ORD NPV. This assessment showed that the investment may not offer value over the long term. We've since been in contact with the fund manager about this assessment and they have provided us with their own fair value assessment. Based on this and discussions we've had with the fund manager and 360 Fund Insight, we have changed some of the criteria we use to assess value and this has resulted in the investment being assessed as providing fair value. What do I need to do?There's no need for you to take any action as a result. This information isn't a personal recommendation to buy or sell the investment mentioned. We're just letting you know the revised fair value assessment verdict, so you're up to date. Of course, we understand that these differing results may be confusing so if you have any questions or concerns, please don't hesitate to get in touch – we'll do everything we can to help you. This investment is now available for online purchases on our platform and if you previously had a regular investment set up into this stock, you can now quickly set it up again online or via the app. Yours sincerely Nick CarringtonCustomer Services Director

[masurenguy] 18/5/2024 07:44

Bluefield Solar Income Fund reports strong quarter as hedging strategy counters weaker prices

Bluefield Partners managing partner James Armstrong discusses the Bluefield Solar Income Fund. In the quarter to 31 March, 2024, the Fund showed resilience, with NAV dropping only slightly due to effective power hedging strategies against fluctuating power prices. The income strategy, which has been consistent since its IPO 11 years ago, includes a significant percentage of power sales hedged for 2024 and 2025, maintaining an income product with a prospective yield of over 8% for shareholders.

Armstrong highlighted the Fund's shareholder strategies, including a share buyback program, which bought back 2.45m shares in March and continues towards a target of £20m. Despite a 20% discount to NAV, the Fund reported the strongest financial performance in over a decade, attributed to strategic management and market conditions. Additionally, Armstrong detailed a strategic partnership with GLIL Infrastructure, signaling a long-term commitment to infrastructure investments and asset management aimed at boosting liquidity and reducing company debt.

[masurenguy] 14/5/2024 07:17

Unaudited NAV and Second Interim Dividend

The NAV as at 31 March 2024 was £815.7m, or 133.9p per Ordinary Share ('pps'), compared to the unaudited NAV of 136.0 pps as at 31 December 2023. This equates to a movement in the quarter of -1.5% and a NAV total return for the quarter of 0.07%.

The published power curves from the Company's three leading independent power forecasters all showed lower price forecasts at 31 March 2024 for the near term compared to the previously published power curves. However, due to the fact Bluefield Solar has over 92% of power sales hedged for FY2024 and 81% through FY2025, the Company's earnings are materially insulated from the impact of reductions in near term power prices, such that the downside impact was limited to 0.3 pps. The decrease in operational updates reflects a slight revision to the cost of the Company's Revolving Credit Facility as well as the minor impact of inflation being slightly below earlier assumptions.

The Company launched its share buyback programme following the release of the interim report on 28 February 2024 and repurchased 2.45m shares during the period to 31 March 2024, providing an additional 0.1 pps of NAV accretion to shareholders.

The completion of Phase One of the Strategic Partnership with GLIL Infrastructure ('GLIL'), an investment of £20 million of equity, alongside £200 million from GLIL, to fund the acquisition of a 247MW portfolio of UK solar assets, and movements in working capital all contributed to the 1.0 pps gain in the NAV over the quarter shown in the table above under Other movements.

Gearing

The Company's UK holding companies and subsidiaries have total outstanding debt of £598m, with a leverage level of circa 42% of Gross Asset Value (31 Dec 2023: 41%).

Second Interim Dividend

The Second Interim Dividend of 2.20p per Ordinary Share (May 2023: 2.10p per Ordinary Share) will be payable to Shareholders on the register as at 24 May 2024, with an associated ex-dividend date of 23 May 2024 and a payment date on or around 24 June 2024.

Dividend Guidance Reaffirmed

The Board is pleased to reaffirm its guidance of a full year dividend of not less than 8.80p per Ordinary Share for the financial year ending 30 June 2024 (2023: 8.60p). This is expected to be covered by earnings and to be post debt amortisation.

[return_of_the_apeman] 07/5/2024 08:14

Read across supports NAV here

[masurenguy] 22/4/2024 23:22

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.”

[masurenguy] 21/4/2024 09:16

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."

[stemis] 18/4/2024 10:26

The one thing I will say about BSIF is that, unlike some, at least they disclose some financial information about the performance of their subsidiaries to compensate for the ridiculous ability (allowable under accounting standards) to not consolidate them and instead put them on the balance sheet at valuations made up by the board...

However I'm not exactly sure what they are disclosing. In the interims they disclose underlying earnings of the portfolio as £43.9m. It's unclear what they mean by 'earnings'? Is it ebitda or does it include depreciation (it certainly doesn't seem to include tax). After this they deduct debt repayments to give 'earnings' available for distribution. All a total muddle.

Anyone actually looked at this or all you all fixated on a meaningless NAV?

[williamcooper104] 17/4/2024 15:42

Still increases the chances of BSIF being taken private

[williamcooper104] 17/4/2024 15:41

Also misses the point that you can't compare the ETFs 60bps (which is expensive for an ETF) and BSIFs 194bps costs The ETF invests in trusts and companies that all have their own costs (whether they are externally or internally managed)Thus the 60bps is ontop of a lawyer of costs at the individual company/trust level Also you can't say the ETF is unleveraged as its investments will mostly be leveraged

[williamcooper104] 12/4/2024 13:04

Shell are thinking about leaving London There used to be a stock enhance in Leeds and one in Manchester Just as one day we will say - there used to be a stock exchange in London (I don't think the LSE will completely disappear but it's going to be become an irrelevance with New York and Amsterdam stealing it)

[panshanger1] 12/4/2024 12:50

5 year low here

[18bt] 12/4/2024 09:35

In my view the role of the FCA and the FRC continually adding new "governance" rules is a major reason for the decline in the UK market size and liquidity. I used to be a director of a couple of listed companies, one in the FTSE250 and I wouldn't touch it now.

[18bt] 12/4/2024 08:21

Another example of the FCA destroying the UK market? They will say that the platforms need to interpret the rules - but change the effing rule or at least issue clarity, especially for non-UK domiciled funds.

[18bt] 12/4/2024 08:19

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?’

[ltinvestor] 28/3/2024 08:56

Heard from a very good source that AJ Bell are in trouble over the email which was a definite error…

[janeann] 25/3/2024 21:38

My email from ajbell still not retracted.......and i messaged them today and still waiting to have a reply