Hazel Capital Renewable Energy VCT 1 and 2

A Product Of New Energy

Investment Approach

Approach

The Hazel VCTs invest in lower risk and profitable UK turn-key and operational renewable energy projects that benefit from long-term government-guaranteed revenues. They aim to provide a more secure investment than is normally anticipated within a VCT structure while utilising the associated tax benefits to enhance returns.

Performance

Hazel Capital launched Hazel Renewable Energy VCT 1 Plc and Hazel Renewable Energy VCT 2 Plc in 2010. £41.6m was raised between 2010 and 2011 representing the most successful ever launch by a new entrant to the VCT market. The Hazel VCTs have since launched two Top-Up Offers (2012 and 2014). Both were fully subscribed to a target fund raise together of just over £8m.

The Hazel VCTs are the best performing VCTs launched since 2009 in terms of Total Return. They have successfully invested in 16 projects including 6 FiT and 2 ROC ground-mounted solar projects. An investor in the VCTs’ original share offer has enjoyed a Total Return (NAV plus dividends to date) of 155.6 for every 100p invested in VCT 1 and 154.5p for every 100p invested in VCT2.

Downing LLP provides administration services to the VCTs across all share classes and details can be found following the links:

Hazel VCT 1 Plc

Hazel VCT 2 Plc

Investment Process

The investment process includes the following steps:

  1. Technology Research
  2. Market Research
  3. Deal Sourcing
  4. Project Screening
  5. Deal Negotiation & Due Diligence Process
  6. Post Completion – Asset Management

Technology Research and Market Research

Risk‐adjusted returns can vary significantly between technologies due to their performance (which is further impacted by the specified site), cost and reliability. Where possible Gresham House New Energy aims to optimise the use of technologies to maximise returns by investing in projects where returns are secured under contract for the investment period. Normally this is achieved by the signing of term off‐take or supply contracts (e.g. Feed‐In‐Tariffs (FiTs), Renewable Obligation Certificates (ROCs)). However, in certain scenarios it may not be possible to mitigate market dynamics in this manner and, therefore, returns are open to market risk. Gresham House New Energy undertakes comprehensive market research in the following areas: electricity prices, capital equipment costs, asset supply demand balance, inflation and interest rates and regulatory matters.

Deal Sourcing

The team maintains a pipeline of opportunities available for investment This helps reduce the delay between the fund‐raising and underlying project investments, which optimises the time‐weighted, return and Internal Rate of Return (IRR) to the investor. Potential projects are presented through a number of sources. Notably, Gresham House New Energy tends to avoid intermediaries which avoids significant introduction costs.

Project Screening

The risk‐adjusted equity IRR is the primary factor considered when assessing the viability of projects. Projects must meet internal hurdle rates.

Deal Negotiation & Due Diligence Process

On completion of screening, information gathering and modelling process, the investment team enters into a due diligence phase where the project undergoes technical, operational, counterparty, financial and legal processes.

Post Completion – Asset Management

Once an asset has been acquired, Gresham House New Energy significantly and continuously aims to improve its performance and energy yield and investment return by reducing overheads as well as through the improvement in the financing structure.

Our Track Record

Gresham House New Energy has a strong track record in the conception, delivery and asset management of renewable energy projects in the UK. Since 2010, the team deployed in excess of £200m during this period (as at 30 September 2017), mainly into solar and wind projects with a significant skew until 2015, towards ground-mounted solar PV as a preferred technology for its visibility and reliability of returns.

The team has a proven track record for the timely deployment of capital as well as for meeting and often, significantly exceeding, targeted returns; achieved by a combination of refinancing, restructuring or extending projects, as well as by making operational enhancements.

VCT Track Record

Gresham House New Energy launched Hazel Renewable Energy VCT 1 Plc and Hazel Renewable Energy VCT 2 Plc in 2010. With a seven years track record, the Renewable Energy VCTs are currently ranked ‘best in class’ when compared to all other VCT offerings launched since then. The VCT performance league table for their 2010/2011 vintage is displayed below.

VCT NameTotal ReturnNAVDivsNAV Date
Hazel Renewable Energy VCT1155.6116.139.530/09/2017
Hazel Renewable Energy VCT2154.5114.939.530/09/2017
Foresight Solar124.995.92930/06/2017
Triple Point 2011115.054.3110.7529/08/2017
Downing FOUR DP2011 – Low Carbon107.533.673.930/09/2017
Octopus VCT 2105100530/06/2015
Downing FOUR DP2011 – General104.419.48530/09/2017
ProVen Planned Exit VCT101.644.65731/10/2015
Puma VCT VII95.2870.282529/02/2016
Ingenious Entertainment VCT 1 ’F’ Shares86.2-86.230/06/2017
Ingenious Entertainment VCT 2 ’F’ Shares86.2-86.230/06/2017
Ingenious Entertainment VCT 2 ’E’ Shares83.7-83.730/06/2017
Ingenious Entertainment VCT 1 ’E’ Shares83.7-83.730/06/2017
Edge Performance “G” Shares77.8749.872831/08/2016

Source: Downing, as at 30 September 2017

How to Invest

These funds are no longer open to investment but please contact Christine, Michael or Joe below to discuss future opportunities