A unique offering, Foresight Renewable Energy Income Fund (FREIF) is designed for investors looking for an attractive and reliable income stream.
The Fund will provide investors with exposure to infrastructure debt that has been raised from renewable energy and associated infrastructure projects. It will be the first Australian infrastructure debt fund where all of the loans are green certified.
The Fund offers investors direct exposure to Australian renewable energy and targets an attractive risk-adjusted return of 4.0% – 4.5% (net of all fees and costs) margin over the Reserve Bank of Australia cash rate. Distributions will be paid quarterly.
The Fund will lend to small-scale infrastructure projects located in Australia (including solar, wind, bioenergy, energy efficiency and energy storage) that aim to combat climate change and contribute towards the global decarbonisation agenda. The Fund will provide these projects with target gearing ratios that are in line with or moderately greater than those typical for large-scale projects. Due to the lack of debt provider availability for small-scale projects due to their size, Foresight anticipates that the Fund can provide loans at a premium interest rate. The Fund is a closed-end fund targeting a five-year life.
Foresights believes that there are five reasons why investors will find this an attractive investment opportunity:
1. Attractive risk-adjusted income
FREIF targets a materially higher income than cash, government bonds or corporate bonds – with lower volatility than equities, real estate or high yield debt instruments.
2. Access to illiquidity premiums
FREIF provides wholesale investors with a rare access point to capture the complexity and illiquidity premiums from the debts of small-scale renewable energy projects.
3. Secure against real assets
The debt portfolio of FREIF will have senior ranking security over the underlying renewable energy projects, which offer protections to reduce the risk and impact of underperformance.
4. A true diversifier
FREIF targets a diversified portfolio in the small-scale renewable energy infrastructure asset class, which has a low correlation with more traditional sources of income, such as equities, real estate and high yield debt instruments.
5. Climate Bonds Initiative certified
FREIF will be governed by a sustainability framework certified by Climate Bonds Initiative, aligning with investors’ sustainable and ethical investment objectives.
FREIF is available to: Australian wholesale investors
Minimum Investment: AUD $100,000
Structure: Unregistered managed investment scheme
Target Yield: Target annual income of 4.0% – 4.5% (net of fees and costs) above Reserve Bank of Australia cash rate
One Funds Management Limited is the Trustee of the Fund and members of One Investment Group provide registry and administration services to the Fund.
Should you have any queries, please contact us on [email protected] or call us on (02) 8277 0000.