I had an interesting call this morning with Tony Dalwood, chief executive of Gresham House (GHE:720p), a fund manager specialising in renewable energy generation, solar power, wind, forestry, infrastructure funds and public and private equity investment strategies. The focus on these key markets also highlights the group’s strong ESG (environmental, social, and governance) credentials which are attracting decent fund flows.
Buoyed by organic growth of 10 per cent (£283m), Gresham House boosted assets under management (AUM) by 17 per cent to £3.26bn in the first half to deliver 15 per cent higher operating profit of £5.2m. Three-quarters of AUM are in hard assets that generate uncorrelated returns to equity markets, and offer enticing yields, so are proving attractive to investors in a zero-interest rate policy environment. They have strong fundamentals, too.
For instance, tight industry pricing and ongoing demand from housebuilders were the drivers behind the 11 per cent annualised investment return from Gresham House’s forestry funds (43 per cent of AUM). Gresham House is capitalising on strong institutional interest in this area as Mr Dalwood revealed that first close of a newly launched forestry fund could raise £40m to £50m of AUM by year-end.