Piers Denne, Future Capital Partners Opalesque Industry Update - Following the recent close of its renewable energy EIS fund Elara I, Future Capital Partners, the £6 billion alternative investment boutique, has launched a new EIS fund that will give investors another chance to capitalise on the firm’s green energy strategy.
The new EIS fund, Elara II, targets annual average returns of 7% on a post tax basis and will be adopting a conservative investment strategy focused on lower risk opportunities in the renewable energy sector. Following Elara I Fund’s raise of £2 million, the new fund will aim to raise at least £4 million, and is expected to close in December.
Like Elara I, the new EIS fund will source a range of lower risk renewable energy opportunities. These opportunities will be similar to the first Elara fund which invested in a company providing services to Blue Energy, a renewable energy development and investment company. Blue Energy specialises in providing renewable energy project development specifically wind and solar projects based in the UK. The firm recently completed work on the UK’s largest solar energy farm in Oxfordshire.
The investment strategy of the fund will take advantage of significant expected growth within the renewable energy arena. The EU’s Renewable Energy Directive states that 20% of all energy in the EU must come from renewable sources by 2020. The level of growth required from renewable energy projects, such as those run by Blue Energy, to meet these targets is expected to be a central driver of performance.
Investors in the fund should qualify for 30% income tax relief on investments up to £500,000 in the current tax year, significantly reducing the initial cost of investment. In addition, investors can defer capital gains tax liabilities by investing in the fund and will qualify for 100% relief from inheritance tax after two years. Any capital gains realised on disposal of investments held by the fund after three years should be exempt from capital gains tax. The fund has a minimum investment of £5,000.
FCP has a strong background in renewable energy investment. In addition to its recently closed EIS fund, the firm also manages Future Fuels, an investment partnership aimed at high net worth investors that is funding and building an industrial scale bioethanol plant in the North of England.
Elara II is targeting high net worth UK investors and the vehicle will offer investors a number of tax relief advantages within the investment.
Piers Denne, Head of Sales & Marketing at Future Capital Partners, commented:
“The successful close of Elara Fund has shown us that there is significant appetite among investors for this approach. One of the main drivers for hitting our 2020 carbon reduction targets will be small scale renewable projects being installed across the UK. Blue Energy is one of the leading companies providing these services, so we could not have asked for a more suitable partner for our EIS. The fact that Feed-in-Tariffs are still extremely attractive for these smaller projects means that we can offer excellent downside protection while also giving our investors outstanding returns.”
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