Can you give a brief overview of your strategy in terms of what you are trying to achieve for investors, your investment process and the make-up of the investment team?
The ThomasLloyd Energy Impact Trust plc ("TLEI" or "the Company") aims to deliver positive and measurable social and environmental impact, along with consistent financial returns - we call this our triple return objective:
- Environmental returns: Protecting the environment and natural resources with significant greenhouse gas reduction
- Social returns: Delivering economic and social progress by building resilient communities and supporting purposeful activity - aligned with the UN Sustainable Development Goals
- Financial returns: targeting 10-12% NAV total return per annum, through both income and long-term capital growth
By helping to fulfil the urgent need for infrastructure finance in Asia, the Company is tackling the global climate crisis with action where it is most required and most efficient, while also providing investors with access to private market opportunities which cannot be found via other listed equities.
The Company constructs and operates a portfolio of sustainable energy infrastructure assets and invests in construction ready and operational assets across renewable power generation, transmission infrastructure, energy storage and sustainable fuel production in the countries where it is most needed including India, the Philippines, Indonesia, Vietnam, Bangladesh and Sri Lanka.
Put simply we invest where our capital has the greatest impact - across emerging markets, with a core focus on Asia. Global Net Zero ambitions cannot be reached without investment in the fast-growing economies in Asia, which currently generates more CO2 pollution than Europe and the USA combined.
At ThomasLloyd, we believe that as our target markets continue to benefit from above average growth rates and significantly higher population growth rates, which is rapidly urbanising, the benefits of lifting millions of low and low-middle income families out of poverty, should not and indeed must not come at the expense of the environment, or result in a net-increase in greenhouse gases globally.
The Investment Manager, ThomasLloyd Group, is one of the longest-established and most experienced investors in sustainable energy infrastructure in emerging markets in Asia. ThomasLloyd has more than a decade of proven hands-on experience of direct investing across India and Southeast Asia in solar and biomass.
The Investment Manager financed the construction and development of the first ever utility-scale renewable energy plant in the Philippines, establishing an operational platform in the region, which allows the firm to deploy capital efficiently in a ready supply of new investment opportunities. The Manager specialises in originating primary assets, in the belief that it can build cheaper than buying existing assets in the secondary market.
How are you positioning your portfolio in uncertain times?
Energy security through the provision of locally-generated power capacity for local consumption has been at the heart of the ThomasLloyd investment strategy since day 1. Our investments both mitigate the need to purchase foreign fossil fuels and ensure continuity of local, affordable electricity. Long term offtake agreements with local and national governments provide certainty both to the communities in which we invest, but also enable us to predict and maintain long term financial returns. This resilience is the primary reason behind the growth of the AIC Renewable Energy Infrastructure sector which now has 19 constituents, with TLEI the only dedicated offering on the LSE providing direct access to sustainable energy infrastructure in fast-growing economies of Asia.
The current uncertain times, therefore, act as a tailwind to the investment strategy pursued by TLEI.
Can you identify a couple of key investment opportunities for your fund you are playing at the moment in the portfolio? This could be at a stock, sector or thematic level.
Recent events have demonstrated the challenges when relying on globally-priced fossil fuels at a time of supply interruption. There is a powerful commercial and investment case for investing in sustainable energy infrastructure for the added benefit of producing locally-generated sustainable long-term energy for local consumption. Our investment strategy focusing on the fast-growing markets of Asia has the triple benefit of reducing balance of payment imbalances by providing locally-sourced energy, at the same time as providing climate mitigation through carbon offsetting, at the same time as creating local jobs, which in turn drive wealth creation. Widespread government focus on these shared aims is helping to extend and expand our ability to source primary asset opportunities in our target markets.
Click here to read more about ThomasLloyd Energy Impact Trust
This post is sponsored by ThomasLloyd
