Wiping out solar funds creates hackles for investors

Investors are calling on the manager of the ASX-listed solar energy investment group New Energy Solar to waive a $10 million fee from the group, which is now in wind-up mode after failing to comply with the investment expectations.

But the fund’s manager — E&P Financial Group, chaired by former Essendon president David Evans and formerly known as Evans Dixon — plans to accept the fee despite pleas from investors and New Energy’s board, according to sources of confidentiality. refused to be named. .

Solar should be a booming business, but Australia's only pure-play publicly traded group is in wind-up mode.

Solar should be a booming business, but Australia’s only pure-play publicly traded group is in wind-up mode.Credit:Bloomberg

Unrest over New Energy Solar’s management has been mounting for some time, with some investors claiming that E&P has used the group as a “cash cow.” They also claim that over the course of New Energy’s seven-year history, $73 million in fees was written off from New Energy, which was once valued at $300 million.

New Energy listed as the first and only pure-play solar investment company on the ASX in 2015. It was modeled after other successful groups. However, the company is currently on track to be delisted and wound down after it failed to raise more capital to fund its expansion plans. According to some investors, New Energy was undone after becoming entangled in the wider problems within the E&P business.

Born from the ill-fated merger of asset managers – Evans and Partners and Dixon Advisory – E&P was previously known as Evans Dixon.

In August, New Energy announced that it had sold its 14 remaining solar assets to MN8 Energy, Goldman Sachs’ renewable energy investment spin-off for $245 million ($365 million). Shareholders will receive capital returns, in tranches, up to 95c, still well below the fund’s current $1.12 net tangible asset coverage. As part of the sale process, E&P will be entitled to a $10 million fee for the disposal of assets.

Sydney-based investment advisor Trevor Thomas, who has more than 350 clients who have invested in New Energy Solar, says he has written to the CEO of E&P to waive the fee as a gesture of good faith.

“New Energy has largely failed because of its entanglement in the Evans Dixon mess, and it seems unreasonable that Evans and Partners would not waive its final compensation to reduce the loss to investors,” the Ethinvest boss told this masthead.

“The asset manager may have a legal right to a final payment, but I don’t think it has a moral or ethical basis.”

Leave a Comment