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Guinness unveils EIS investment fund for clean energy projects



Guinness Asset Management has launched a new enterprise investment scheme (EIS) fund that will invest in British sustainable energy companies.

An EIS fund is a collective investment that allows people to invest in small, fast-growth businesses – many of which are promising social enterprises – while getting tax breaks in the process.

Guinness EIS 5 is targeting investment in renewable energy companies which have predictable revenues and low technology risks. It is hoping to deliver attractive, risk-weighted returns in excess of £1.50 to investors – including 30p EIS Income Tax Relief – per £1 invested.

The fund, which carries an initial 3% charge, will be managed by Shane Gallwey and Edward Guinness.

Guinness said that many investors have been using EIS investments in order to diversify their portfolios, “generating returns with low correlations to the equity markets and making investments that have attractive returns and tax benefits.”

Gallwey added, “We continue to see a wealth of investment opportunities in the small-scale renewables sector. The UK has a maturing renewables sector with falling technology costs and increasingly experienced developers. The country’s high and rising energy costs has led many businesses to look to renewables as a way of reducing these costs.

On Monday, a group of high profile investors urged chancellor George Osborne to deliver a clearer energy policy and address the lack of a 2030 decarbonisation target in the energy bill, which they say is blocking sustainable energy projects and discouraging investment.

The letter, signed by Aviva Investors, Triodos Bank and WHEB Partners among others, asks the chancellor to include a “meaningful” target in the legislation, as the Conservative party conference takes place in Manchester. 

Steve Waygood, chief of responsible investment officer at Aviva Investors, said, “As investors, we acknowledge that climate change represents a significant threat to global GDP and consequently the value of the assets we manage.

“We are increasingly factoring climate change risks into the decisions we make, but the confusion over medium-term energy policy is a significant impediment. We call on the chancellor to support legally binding decarbonisation targets, which will benefit all stakeholders in the investment chain.” 

Further reading:

Guinness launches £10m renewable energy investment fund

Investors ask George Osborne for clearer renewable energy policy

UK told to keep up with fellow competitors in ‘global green race’

UK is fourth most attractive country for renewable energy investment