Gresham House PLC Publication of Prospectus

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Gresham House PLC

17 October 2018

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT

This announcement is an advertisement for the purposes of the Prospectus Rules of the UK Financial Conduct Authority ("FCA") and not a prospectus and not an offer of securities for sale in any jurisdiction, including in or into or from the United States, Australia, Canada, Japan or South Africa. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information in the prospectus in its final form (the "Prospectus") expected to be published by Gresham House Energy Storage Fund Plc (the "Company") prior to Admission (as defined below). A copy of the Prospectus will, following its publication, be available on the Company's website at newenergy.greshamhouse.com/esfplc, subject to applicable securities laws and will be available for inspection at the Company's registered office at 7th Floor, 9 Berkeley Street, London W1J 8DW. The Prospectus will also be available on the National Storage Mechanism at www.morningstar.co.uk/nsm.

Gresham House Energy Storage Fund Plc (the "Company")

Publication of Prospectus

Gresham House Energy Storage Fund plc (LSE: GRID) is pleased to announce the publication of a Prospectus relating to its intention to float with a target to raise gross proceeds of up to GBP200 million from the IPO and the subsequent placing programme.

The Company will invest in utility-scale Energy Storage Systems ("ESS") in Great Britain that provide services to the National Grid to support grid stability as well as delivering the essential infrastructure required to enable Great Britain's increasing reliance on intermittent sources of renewable energy such as wind and solar.

The Company will offer investors the benefit of an attractive and sustainable yield of 7.0% with potential for capital growth*. The Company also offers infrastructure investors a useful source of diversified income with a robust income stream not dependent on renewable subsidies.

The IPO and admission to trading on the Main Market of the London Stock Exchange, within the Specialist Fund Segment ("Admission"), is expected to become effective on 5 November 2018.

The Company is a newly incorporated closed-ended investment company and registered as an investment company under Section 833 of the Companies Act 2006. The Company intends to operate as an investment trust within the meaning of Chapter 4 of Part 24 of the Corporation Tax Act 2010.

The Prospectus has been approved by the UK Listing Authority and a copy will shortly be available on the Company's website: newenergy.greshamhouse.com/esfplc, and at the Company's registered office: 7th Floor, 9 Berkeley Street, London W1J 8DW. A copy of the Prospectus has been submitted to the National Storage Mechanism and will be available shortly for inspection at www.morningstar.co.uk/uk/NSM.

Key highlights

-- Compelling investment opportunity in fast growing sector. Battery-based energy storage provides access to multiple revenue streams that are not dependent on renewable subsidies and are uncorrelated with the absolute level of power prices, with a combination of short and longer-term revenue streams for each asset. The intermittent nature of renewable energy places pressure on the National Grid to match supply and demand on a real-time basis, particularly as traditional coal and gas-fired generation is being withdrawn. ESS solve this problem by providing services to the National Grid to maintain grid stability as ESS can absorb as well as release energy as required in real time;

-- Attractive and sustainable dividend with potential for capital growth. Target dividend payment of 7.0p (4.5p in first year);*

-- Target NAV total return of 8.0% p.a.* Once gross proceeds have been fully deployed, the manager expects to introduce leverage up to a maximum of 50%. Gearing, coupled with the expected asset management and revenue improvements, should increase the NAV total return target to 15.0% p.a.;**

-- Identified seed portfolio and pipeline. Proceeds from the IPO are contracted to be deployed in a seed portfolio comprising 70MW across five fully operational sites, from the date of admission to trading. Furthermore, the Company will have exclusivity over an additional 132MW ready to build projects. A further pipeline project of 80MW is currently in an advanced stage of negotiation, and an additional pipeline of >50MW, giving the ability to deploy 200MW+ within 12 months of IPO;***

-- Seed Portfolio Aggregate Project Value of GBP57.22 million, not taking into account any debt owed, working capital balances or cash held by any of the Seed Project Companies, comprising acquisition consideration for each of the Seed Project Companies.

-- Effective structure with long-term, viable approach to fundraising. London Stock Exchange (LSE) traded closed-end fund targeting gross proceeds of up to GBP200 million from the IPO and the subsequent placing programme;

-- An experienced independent board has been established under the Chairmanship of John Leggate CBE, FREng, an energy sector expert;

-- Cornerstone investment of more than GBP30 million. The Company has secured commitments from members of the Gresham House management team, funds under management by the Gresham House Group and certain members of Noriker. These investors have agreed to commit in aggregate approximately GBP33.5 million, which would comprise, in aggregate, approximately 16.75 per cent. of Ordinary Shares issued by the Company on first Admission, assuming that GBP200 million are raised.

-- Investment manager with proven expertise in developing and operating ESS. Gresham House New Energy has an experienced management team who have worked together for over 10 years, with strong renewable and energy storage experience. To date, the team has successfully worked on 28 solar projects with a total capacity of 290MW and five energy storage projects with 70MW of capacity. Gresham House New Energy and Noriker Power have collaborated since 2016 to develop 70MW of operational ESS projects which will form the seed portfolio in the Company. Noriker Power is 28% owned by Gresham House and is a specialist in the design of battery control systems. It provides a sound technical underpinning and oversight of operational ESS projects. Gresham House New Energy was formed in November 2017 after Gresham House, the specialist alternative asset manager, acquired Hazel Capital LLP.

John Leggate, Chairman of Gresham House Energy Storage Fund, said: "We believe ESS has significant potential from an investment standpoint and is fundamental to a renewable energy future in the UK. We are confident that the experience and expertise of our team, coupled with our identified seed portfolio and firm pipeline will be able to deliver excellent near-term shareholder value in what is a rapidly emerging next generation infrastructure sector."

Board of Directors

The Company's board of directors (the "Board") comprises three non-executive directors, all whom are independent of Gresham House, and responsible for the determination of the investment policy of the Company as well as the supervision of the implementation of such policy. The Board currently consists of:

John S. Leggate CBE, FREng (Chairman and Independent Non-Executive Director) - John is highly experienced as an energy sector executive and is a venture investor in the "clean tech" and digital technologies. John has significant board experience and is currently on the board of cyber security rm Global Integrity in Washington DC and is an advisor to the Board of ACWA International, the largest independent power producer in Saudi Arabia.

Duncan Neale (Audit Committee Chairman and Independent Non-Executive Director) - Duncan is a CFO & Finance Director with over twenty years of commercial experience working for both publicly listed and privately-owned companies. Duncan is a Fellow of the Institute of Chartered Accountants and quali ed with Price Waterhouse in London.

David Stevenson (Independent Non-Executive Director) - David is a nancial journalist and commentator for a number of leading publications including The Financial Times (the Adventurous Investor), Investment week (The contrarian), Money Week and the Investors Chronicle. He is also executive director of the world's leading alternative nance news and events service www.alt .com, which focuses on covering major trends in marketplace lending, crowdfunding and working capital provision for small to medium sized enterprises.

Expected timetable

 
 Placing Opens                         17 October 2018 
 Offer for Subscription opens          17 October 2018 
                                      ------------------------------ 
 Latest time and date for receipt      11.00 a.m. on 31 October 2018 
  of Application Forms under the 
  Offer for Subscription and payment 
  in full or settlement of the 
  relevant CREST instruction 
                                      ------------------------------ 
 Latest time and date for receipt      12.00 p.m. on 31 October 2018 
  of Placing orders 
                                      ------------------------------ 
 Admission of the Ordinary Shares      8.00 a.m. on 5 November 2018 
  to the Specialist Fund Segment 
  and dealings commence 
                                      ------------------------------ 
 CREST accounts credited in respect    as soon as practicable after 
  of Ordinary Shares issued in          8.00 a.m. on 
  uncertificated form                   5 November 2018 
                                      ------------------------------ 

 Certificates despatched in respect    week commencing 19 November 
  of Ordinary Shares issued in          2018 
  certificated form 
                                      ------------------------------ 
 Placing Programme opens               6 November 2018 
                                      ------------------------------ 
 Placing Programme closes              16 October 2019 
                                      ------------------------------ 
 

Capitalised terms used in this announcement but not defined herein bear the meanings ascribed to them in the Prospectus.

For further enquiries, please contact:

 
 Gresham House New Energy 
  Ben Guest                   [phone] 
 Cantor Fitzgerald Europe 
  Richard Harris                [phone] 
  Robert Peel                   [phone] 
  Alan Ray                      [phone] 
 Montfort Communications      [e-mail] 
  Gay Collins /                [phone] 
  Louis Supple                 / 
                               [phone] 
 

About Gresham House

Gresham House plc is an AIM quoted specialist asset manager providing funds, direct investments and tailored investment solutions, including co-investment across a range of highly differentiated alternative investment strategies. Our expertise includes timber, renewable energy, housing and infrastructure, strategic public and private equity, (private assets). The Group aims to deliver sustainable financial returns and is committed to building long-term partnerships with clients, (institutions, family offices, high-net-worth individuals, charities and endowments and private individuals) to help them achieve their financial goals.

Shareholder value creation will be driven by long-term growth in earnings as a result of increasing AUM and returns from invested capital.

www.greshamhouse.com

* This is a target only and is based on current market conditions as at the date of the Prospectus and is not a profit forecast. There can be no assurance that this target will be met or that the Company will make any distributions at all. This target should not be taken as an indication of the Company's expected or actual current or future results. The Company's actual return will depend upon a number of factors, including but not limited to the size of the Issue, the Company's net income and the Company's ongoing charges figure. Potential investors should decide for themselves whether or not the return is reasonable and achievable in deciding whether to invest in the Company.

** This target assumes leverage is introduced once gross proceeds have been fully invested and certain further asset management activities are completed in respect of the ESS projects. All references to leverage refer to the ratio of borrowings to Net Assets.

*** Pipeline projects do not have EPC contracts in place. Gresham House Group has exclusivity in place and is in advanced stages of negotiations to acquire the further pipeline project of 80MW currently in an advanced stage of negotiation. This site has a full suite of project rights. Additional pipeline includes one project of 50MW in which members of the Gresham House New Energy management team have an interest and which has a full suite of project rights as well as several other projects at various stages of development.

This announcement is intended for persons in the UK who are investment professionals under Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or high net worth companies or other persons falling within Article 49 of that Order.

The Company is subject to a number of risks. These include the reliance on third party providers to carry on its business and there being no material adverse change in laws or regulations which affect the Company or its portfolio. In addition, if the growth in renewable energy does not continue as expected this may have an adverse impact on the Company's performance. When certain contracts with National Grid Electricity Transmission PLC expire the Company may not be able to obtain contracts on the same terms or at all which may harm the performance of the Company. The introduction of leverage by the Company may increase the volatility of returns and providers of leverage would rank ahead of investors. A full explanation of risks is in the Prospectus.

The Company will pay an annual fee to Gresham House based on its net assets namely 1 per cent. on the first GBP250 million of net assets, 0.9 per cent on net assets between GBP250,000,001 and GBP500 million and 0.8 per cent on net assets in excess of GBP500 million, plus VAT. The Company will also reimburse reasonable expenses incurred by Gresham House incurred in performance of its management of the Company.

This announcement has been issued by Gresham House Asset Management Limited, which is authorised and regulated by the Financial Conduct Authority.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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October 17, 2018 09:47 ET (13:47 GMT)