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Schroders looks to boost ESG credentials with Greencoat deal

Asset manager paying £358m upfront for 75 per cent of renewables specialist
Schroders looks to boost ESG credentials with Greencoat deal


  • Greencoat has £6.7bn of assets under management
  • Renewables assets held via two investment trusts and private markets business


Schroders (SDR) confirmed it had reached a deal to buy 75 per cent of Greencoat Capital for an initial £358m, with an earn-out that could increase by up to £120m over the next three years, subject to it hitting certain revenue targets.

Greencoat is a renewables-focused investment manager which had £6.7bn worth of assets under management at the end of November, having raised £1.1bn since its most recent year-end in March. It earned a pre-tax profit of £20m on revenue of £38.2m during that year.

Greencoat operates more than 200 wind, solar and other renewables-powered assets capable of generating, in aggregate, more than three gigawatts of energy. These are held across the UK, Europe and the US through two investment trusts and a private markets business. Schroders said the purchase was in line with plans to build a “comprehensive” private assets platform and also aligns with its focus on sustainability.

The deal also allows for Schroders to acquire the remaining 25 per cent stake at an unspecified point in the future, via options held by it and Greencoat’s four management shareholders.

It follows Schroders’ purchase of Amsterdam-based Cairn Real Estate last month for €30m (£25.5m) from Hamburg-based MPC Capital, as well as the £230m acquisition of River & Mercantile's Solutions arm announced in October. Although this is a fair amount to digest at once, the company has a solid track record of integrating acquisitions and, at 13.7 times forecast earnings, its shares are trading below their five-year average of 15 times. We maintain our buy recommendation.