Asset manager Gresham House has is to acquire Hazel Capital, a new energy infrastructure asset manager.
The proposed acquisition is expected to complete in Q3 of 2017, and intended to be funded using shares issued at a premium to the current share price, plus a deferred earn out in cash and shares. Until 31 December 2017, Gresham House has been granted a period of exclusivity to finalise its due diligence and the terms of the proposed acquisition.
Hazel Capital advises on over £100 million of assets with a product portfolio including Venture Capital Trusts (VCT) and Enterprise Investment Schemes (EIS) which are designed to generate attractive yields with downside protection provided by real asset backing. The Hazel Renewable Energy VCTs launched in 2010 and has since had net returns of over 50 percent, prior to any tax benefit considerations.
As part of the agreement, Gresham House has agreed to provide growth capital in the form of a secured loan of up to £4.6 million to Hazel Capital during the exclusivity period, including arrangement fees to develop its immediate pipeline of Energy Storage System (ESS) projects. Full repayment is due by the end of the period of exclusivity (31/12/17).
Chief executive of Gresham House, Tony Dalwood, commented: “We see a substantial growth opportunity in renewables and new energy infrastructure-related assets and today's announcement is the first step towards bringing a recognised expert investor in this growing sector into our Group.
“Hazel Capital's success in generating market leading returns through its VCT and EIS platform within the growth areas of infrastructure related asset management, fits well with our strategy to develop our range of alternative and illiquid investment solutions for long term investors.”
Hazel Capital focuses on the energy infrastructure sector and was founded 10 years ago by Mr Guest. It entered the battery storage/ESS market as well as the electric car charging infrastructure markets in 2015. Over the course of this year, it is expecting to commission three ESS projects serving the National Grid.
Gresham House recorded assets under management of £359 million for the first half of 2016, from launch in June 2015. In February of 2017, the firm announced the launch of the Gresham House British Strategic Investment Fund (BSIF), which it said is “part of an alternative investment platform to support the investment objectives of longer term institutional investors”, including family offices as well as local government pension schemes and endowments.