Premier Miton Group (PMI) Investor update summary

Portfolio focus and strategy

• The portfolio allocates 30% to renewable energy developers and 38.1% to YieldCos/investment companies, balancing risk and reward.

• Developers are integrated, handling project inception, construction, and operation, often selling partial stakes to fund growth.

• The trust aims for high income and long-term capital growth through global renewables exposure, managed by an experienced fund manager since 2012.

• Asset allocation includes developers, YieldCos, utilities, and technology/service providers, with portfolio weights ranging from 0.4% to 5.5% across holdings.

• The portfolio is fundamentally low risk, with more exposure to investment companies but potential for increased developer weighting as growth accelerates.

Market conditions and valuation

• Renewable energy sector performance has lagged broader markets, leaving many companies trading below fair value.

• Current share prices often reflect only existing assets, with little value attributed to future growth pipelines.

• Returns on new projects have increased, with spreads over risk-free rates widening, yet market valuations remain conservative.

• Developers often achieve high IRRs, especially when capital costs fall after contracts are secured.

• Valuation multiples typically do not capture future growth, despite strong project pipelines and contracted revenues.

Key holdings and growth drivers

• Major holdings include Bonheur, Grenergy, RWE, Northland Power, and Enefit Green, each with significant renewable capacity and expansion plans.

• Portfolio weights for developers range from 0.4% to 5.5% globally and regionally.

• Bonheur is expanding offshore wind capacity, with low net debt and strong family ownership; 805 MW operational, 4,075 MW in development, 2023 renewable production 1,713 GWh.

• Grenergy is building the world’s largest solar-plus-storage project in Chile, with high contracted revenues, asset rotation gains, 848 MW operational, 823 MW under construction, $1.4bn Chile project, IRR 11-14%.

• RWE is transitioning to a pure-play renewables company, investing €55 billion in CapEx, 17.4 GW renewable capacity (2023), targeting >65 GW by 2030.

• Northland Power focuses on contracted offshore wind and battery storage, 2,239 MW operational, 875 MW under construction, 6,633 MW pipeline.

• Enefit Green is rapidly growing in the Baltic region, 514 MW operational, 511 MW under construction, generation to rise from 2,212 GWh (2024E) to 4,217 GWh (2027E).