Guinness Asset Management is to create an onshore mirror version of a $150m (£74m) alternative energy fund it manages for American investors. The Guinness Alternative Energy fund, structured as a Dublin-based Oeic, will replicate a fund the group runs for Guinness Atkinson, its sister company in America.
The retail fund will be launched in January, subject to regulatory approval. According to Tim Guinness, chief executive officer and founder of the group, the new fund will be the first of several specialist and thematic offerings it will roll out.
Guinness (pictured), who runs the onshore and offshore Investec Global Energy funds, says other planned funds will offer investors exposure to investments in Asia and to innovation, its other areas of focus.
Like the existing Guinness Atkinson Alternative Energy fund, launched at the end of March last year, the new retail fund will invest in about 45 global energy companies.
Managing the fund alongside Guinness will be his son, Edward Guinness, and Matthew Page. Guinness says: “There are 300 companies in our investment universe. Of these about 100 have a market cap below $100m, 100 are between $100m to $500m and the other 100 are $500m plus. We rarely buy companies with a market cap of less than $100m.”
The three main energy sectors represented in the existing fund are solar polar (35%), wind power (28%) and hydro power (14%). The rest of the portfolio is in biofuels, biomass, energy efficiency, geothermals, fuel cells, and wave and tidal power.
Guinness says the reason 75% of the portfolio is invested in only three sectors is that these are where the best investment prospects are.
In the first year of the new fund Guinness says he would like to raise £100m. To do this the fund will target wealth managers.
It will not target commission-based advisers because the fund’s charging structure has been designed to mirror America’s no-load-fund model.
As such, the initial charge on the fund is 2% for investments between £10,000 (the minimum investment) and £50,000. There will be no initial fee for investments above £50,000 and no performance fee will be applied to any investment.