Results

EUR 72.9 million

net assets
as per end of 2016

Financial results

During 2016, Triodos Renewables Europe Fund’s net assets increased to EUR 72.9 million (2015: EUR 64.1 million). The fund closed its financial year with a net operating income of EUR 1.3 million. EUR 3.0 million was generated from dividends and interest income. In addition, the fund received EUR 1.8 million in subordinated debt repayments, resulting in a cash yield on a portfolio level of 5.8%, compared to 4.4% in 2015. This was mainly due to higher distributions to the fund from the wind and solar investments. In addition, the Spanish solar investments generated a minimal return for the fund in 2016. The bottom-line result was EUR 1.1 million (2015: EUR 2.8 million).

Return

The overall return of the fund (I-cap) in 2016 was 1.6% (2015: 4.7%), despite a 2.5% return in the final quarter. The portfolio value increases when new investments are made and as the renewable energy assets in the portfolio mature. This value is calculated by forecasting the future dividends, interest and loan repayments of the wind and solar PV projects. Overall, the return was negatively influenced by lower power price forecasts and lower-than-anticipated production. The fund was able to offset part of this with better-than-expected extensions of operational contracts in the portfolio in Germany, the Netherlands and Spain. In addition, lower inflation and a reduced discount rate in line with the market were factors contributing positively to the fund’s performance. Finally, the return was negatively influenced by the lower investment ratio of 77.2% of the total assets (2015: 86.0%).

Return based on net asset value (NAV) per share*

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Share class

1-year
return

3-year
return p.a.

5-year
return p.a.

Return p.a.
since inception

*

NAV per share is based on share prices as per December 29, 2016, i.e. the last price at which shares were traded in the reporting period.

**

The Z share class has a limited history. Returns prior to the launch date of the Z share class are based on the returns of the comparable R share class.

 

 

 

 

 

R-cap (EUR)

1.0%

2.8%

0.1%

2.4%

I-cap (EUR)

1.6%

3.5%

0.7%

3.0%

Z-cap (EUR)

1.5%

3.4%

0.4%**

2.6%**

 

 

 

 

Liquidity

The liquidity percentage of the fund increased to 22.7% of the fund’s net assets as at year-end 2016 (2015: 14.0%). The increased net inflow into the fund and the strong cash yield from projects contributed to the increase in liquidity exceeding the new investments in 2016. Liquidity is considered more than adequate for the fund to meet its short- and medium-term payment obligations and facilitate weekly subscriptions to and redemptions of its shares.

Given its semi open-end structure, the fund has a liquidity ratio target of 10% of the fund’s net assets, including a EUR 2.5 million standby credit facility. Including this standby facility, which is available on demand, the available cash and cash equivalents add up to 26.1% of the net assets.

Costs

The largest item in the cost structure of Triodos Renewables Europe Fund is the management fee paid to the investment manager. The latter uses this fee primarily to cover staff costs and travel expenses incurred in connection with investments. The investment process is generally quite labour-intensive.

Other significant costs are the fees paid to RBC Investor Services Bank, for instance for its depositary and administrative services. In 2016, Triodos Renewables Europe Fund’s ongoing charges, including the management fee, amounted to 2.45% for the Z share class, 2.97% for the R share class and 2.42% for the I share class (2.53%, 3.07% and 2.45%, respectively, in 2015).

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