In this weekly series, investment reporter Elliot Gulliver-Needham sits down with a fund manager for a Q&A. This week, we’re hearing from Minesh Shah, manager of The Renewables Infrastructure Group (TRIG).
How does your fund stand out from others in the same market?
The Renewables Infrastructure Group (often known as TRIG) is a £3bn FTSE 250 listed investment company solely focused on renewable energy infrastructure.
Our portfolio is diversified across geographies and technologies. Our investments span six power markets in the UK and Europe, and across onshore and offshore wind farms, solar parks and battery storage projects.
We have the largest energy generation capacity of any of the London-listed renewables investment companies. TRIG’s portfolio can power up to 1.8m homes with clean electricity and displace up to 2.2m tons of carbon annually.
TRIG is unique in that it benefits from two specialist managers: InfraRed Capital Partners, on the investment side, and RES, from an operational perspective. This management team provides deep expertise across the clean energy asset class.
InfraRed has a track record of creating and enhancing value across all stages of the asset lifecycle, having developed and refined their approach over 25+ years. This also means that it has deep and valuable market insights and proprietary data points that bring material benefit to TRIG’s investment approach.
RES is the world’s largest independent renewable energy company with 40+ years’ experience developing, constructing, and operating renewable energy projects. RES draws upon the experience and skills of a large pool of expertise and as a result is at the cutting edge of developments in the sector.
Which of your holdings are you most excited about?
The growing opportunity to invest in grid-scale battery storage is a key focus for TRIG to complement our generation portfolio as well as enhance shareholder returns.
Earlier this year, we acquired Fig Power: a UK-based battery storage developer with a 1.7GW development pipeline. Battery storage is a critical component of the energy transition and the expansion of renewables.
For TRIG, investing in batteries offers diversifying and complementary revenue streams. In addition to being able to develop, build and hold projects from our proprietary pipeline ourselves for the long- term, we also expect to be able to sell projects to third parties, realising development profits for TRIG.
The strength of our balance sheet means that we expect to be able to fund our wider development pipeline from our own resources, including retained cash and debt capacity, meaning we are not dependent on equity issuance to execute this strategy.
What’s the biggest mistake you’ve made in the fund?
We are delighted to have played a role in the campaign to persuade the government to reform the cost disclosure rules for investment companies and level the playing field.
In hindsight, we might have engaged when the regulations first came into force to have nipped the matter in the bud before it led to its unintended consequences.
We look forward to seeing the forbearance provided by HM Treasury and the FCA being embraced by all market participants as its intent is cemented into legislation. We hope this will be a catalyst for investment companies, and in particular, drive further investment into infrastructure and renewables, which are critical for the government to achieve its missions to promote both economic growth and clean energy.
What’s one change you’ve made in the fund recently? Why didn’t you make it sooner?
Recently we’ve undertaken a series of disposals as part of a disciplined approach to capital allocation. Since the middle of 2023, we have successfully sold stakes in seven assets totalling £210m. These sales were agreed at an average 11 per cent premium above the assets’ respective valuations. They enhance TRIG’s net asset value and create headroom for future growth.
Portfolio rotation has always served as a key tool of active management. As our capital allocation priorities have evolved, we have increased the number of disposals this year and the premiums achieved continue to underscore the inherent value of TRIG’s portfolio.
What’s the biggest change you’ve seen in the industry since you started?
Having worked in renewables and infrastructure for sixteen years, I’ve witnessed a number of changes that have altered the way in which the sector operates. The biggest change is how the sector has matured, and in doing so attracted new investors. In particular, they see the opportunity to invest in large, real assets that they might otherwise not be able to access through a liquid structure with expert managers.
This has meant an increase in interest in UK investment companies from mainstream institutional investors around the world, in particular from the US, Australia, Switzerland, Ireland and the Netherlands, among others. We have also seen a significant increase in retail investors in the sector. They have been attracted by the resilient income and opportunity for capital growth as well as the being able to participate directly in the green transition.