JLEN
JLEN
 

Business model

Objective

The Company seeks to acquire infrastructure assets with attractive characteristics through the extensive origination network of its Investment Adviser.

The Company seeks to enhance returns,where possible, through active management that identifies opportunities to increase revenues and decrease costs.

The Company seeks to maintain the assets to a high standard over their lifetime to support the long-term investment outlook of the Company and its investors.

The Company’s approach to raising new equity capital is consistent with JLEN’s business model objectives. New equity is raised periodically to repay drawings under JLEN’s RCF used to acquire assets. The Company does not seek to raise more cash than drawings under the RCF and so will not face pressure to deploy capital or suffer a reduction in returns. This assists the Company in maintaining discipline and targeting attractive assets.

Competitive advantage

Investment Adviser – Foresight hasa strong track record of managing assets in the sector and has access to an extensive pipeline of new projects.

Broad investment mandate/policy – allows for investment across a diversified range of technology sub-sectors and geographies, helping to reduce risks within the portfolio and providing a broader base of assets to consider at the acquisition stage.

Existing portfolio – well established portfolio of assets which have the benefit of strong operational track records and predictable, wholly or partially inflation-linked cash flows supported by long-term contracts.

Sustainability – investment mandate is limited to investment in projects and assets which support a more environmentally friendly approach to economic activity and JLEN invests in assets with long project lives of up to 35 years.

Operating model

1

Acquire

The Investment Adviser uses its network of relationships to originate environmental infrastructure opportunities. These are screened for suitability and attractive opportunities are subject to a full due diligence process to assess risks, valuation assumptions and ESG considerations. Investment approval is multi-level and culminates in a decision of the Company’s Investment Committee.

ESG considerations

ESG criteria are an integral element of the investment assessment at the acquisition stage. The Investment Adviser undertakes a thorough rating analysis against a pre-determined minimum threshold for that asset class.

2

Maintain

Active asset management is employed by the Investment Adviser to maintain consistent performance and asset condition across the portfolio, identifying and, where possible, mitigating risks.
Strong communications between the JLEN Board, the Investment Adviser and external asset managers and other operational and corporate counterparties aid in the management of the assets.

ESG considerations

Third-party service providers, sometimes with the assistance of technical advisers, monitor and manage the ongoing performance of each asset in the JLEN portfolio and these third parties are regularly assessed by Foresight.

3

Enhance

All assets are included in a programme of enhancement initiatives to increase operational and financial performance and to better meet ESG objectives. Where appropriate, the Investment Adviser identifies where value can be realised to enhance the valuation of the portfolio to the benefit of all stakeholders.

ESG considerations

The Investment Adviser continually seeks to improve all areas of ESG across the portfolio and new assets are assessed to see where improvements to ESG matters can be improved over the tenure of ownership.

Who benefits

Shareholders

Institutional and retail

Local communities and public authorities

Local residents, local authorities and institutions, trade bodies

Company’s operational counterparties

O&Ms, other suppliers

Underpinned by

Risk management

Strong governance

Financial management

Portfolio sectors

Investment policy

Environmental infrastructure is defined by the Company as infrastructure projects that utilise natural or waste resources or support more environmentally-friendly approaches to economic activity. This could involve the generation of renewable energy (including solar, wind, hydropower and biomass technologies), the supply and treatment of water, the treatment and processing of waste, and projects that promote efficiency.

The Fund aims to invest in a range of investments both geographically and across different types of environmental infrastructure in order to achieve a broad spread of risk in the Company’s portfolio. The assets in the Fund’s portfolio are underpinned by well-established technologies, and have proven operational performance.
The substantial majority of projects in the Investment Portfolio by value and number will be operational. No more than 15% of the Net Asset Value of the Fund will be invested in projects in construction and not fully operational.

At least 50% of the Investment Portfolio by value will be based in the UK and the Fund will only invest in projects located in OECD countries. No single project will represent more than 30% of the Net Asset Value of the Fund immediately post acquisition.

JLEN may enter into short-term financing to facilitate acquisitions. Such short-term financing is limited to 30% of the Net Asset Value. It is intended that any facility used to finance acquisitions will be repaid, in normal market conditions, periodically through further equity Fundraisings.
The Fund may acquire projects that have non-recourse project finance in place at the Project Entity level. There is an additional gearing limit in respect of such non-recourse debt of 85% of the Gross Project Value (being the total enterprise value of such Project Entities) for PFI/PPP projects and 65% for renewable energy generation, measured at the time the debt is drawn down or acquired as part of an investment.

Fund objectives

1

Predictable income growth for shareholders

Provide investors with a dividend of 6.66 pence per share for the year to 31 March 2020.

2

Preservation of capital over the longer term

To preserve the capital value of the portfolio over the long term on a real basis through active management of the portfolio and the reinvestment of cash flows not required for the payment of dividends.

3

Investment, growth and diversification

To invest in operational environmental infrastructure projects in OECD countries with established technologies, operational track records and that have the benefit of long-term, predictable, wholly or partially inflation-linked cash flows supported by long-term contracts or stable regulatory frameworks.

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Shares offered by the Company have not been and will not be registered under the Securities Act or with any securities regulatory authority of any State or other jurisdiction of the United States and, subject to certain exceptions, may not be offered or sold within the United States or to, or for the account or benefit of, US Persons (within the meaning of Regulation S under the Securities Act). The Company has not been and will not be registered as an “investment company” under the United States Investment Company Act of 1940 and investors will not be entitled to the benefits of that Act. In addition, relevant clearances have not been, and will not be, obtained from the securities commission (or equivalent) of any province of Australia, Canada, Japan, the Republic of South Africa, New Zealand or any Excluded Territories and, accordingly, unless an exemption under any relevant legislation or regulations is applicable, none of the Shares may be offered, sold, renounced, transferred or delivered, directly or indirectly, in Australia, Canada, Japan, the Republic of South Africa, New Zealand or any Excluded Territories.

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