Green/ethical investing

Assume you mean giving donations and not receiving   Have you looked at any funds instead as having a manager may hopefully add a safety level of sorts?

I haven’t been able to see a compelling reason to invest in renewables via p2p platforms for a few years. Early on (say 2013/14), P2P platforms offered some decent 10%+ yield opportunities with low LTV (sub 60%) and debt service ratios of >2 (including amortizations) for wind turbine and anaerobic digester construction projects.

That trailed off in 2015 and by 2016 many projects being offered were for 70% LTV with DSRs of just 1.2-1.3 etc (often without amortizations). Any simple stress loss analysis (say shifting the power curve lower on a WT or assuming a delay that would drop the FIT rate) would show that the DSR was simply not high enough. Worse, platforms were offering some of this at 7-8%. 

Renewable funds were simply a far better proposition by early 2016. Funds like BSIF, FSFL etc were offering an inflation-linked 6-7% yield for solar, operational projects (so far lower risk in terms of LTV, much higher DSR, solar vs wind etc), with professional management, liquidity, a conservative NAV calculation and easily wrapped into an S&S ISA or SIPP. I just don’t understand why anyone would have invested in the GEIA say with a max return of 7% (not inflation-linked) over a basket of these types of funds. Personally, I bought mainly BSIF and this has delivered slightly over 12%/annum. I just get a feeling people keep seeing “P2P” and think this means it’s good value. P2P is where you go only after exhausting all the conventional vehicles by which to manifest an investment strategy. It should be the last point of call, not the first.

This is where I see a lot of my investment funds going in the future for both the ethical and financial considerations. I would love to hear more of your experience of BSIF; is it available on most S&S ISA and SIPP platforms?

Many thanks

Sorry, wasn't clear - I've only recently joined, so no returns for that reason. 

As far as I know it should be offered on both SIPP and S&S ISA platforms. I've held it inside both with no issues in terms of buying/selling and in the way dividends have been treated. Basically just another closed-end fund.

I only started to put money into BSIF in 2015; just a dribble to replace some maturing wind turbines on TC and AC. Someone else, who is more knowledgeable on renewables, pointed me in the direction of a few renewable funds (BSIF, FSFL, NESF, UKW, TRIG, JLEN etc) and I used a few dips in 2016, before and after Brexit, to add. They have never been hugely in favour from analysts but I felt their NAVs were very conservatively marked. I bought a few of them but BSIF stood out as my favourite.

These types of funds are not really my thing since they are "bond proxy" funds, equity funds but focussed on income generation, similar to infrastructure funds. I just thought most of them were far better value than equivalent renewable P2P loans. The clear problem with all bond proxy funds is that they are highly dependent on bond yields (if yields go up their price will fall). With respect to these specific renewable funds, the analysts are always concerned that the solar farms that they own clearly have a finite lifetime and there will be a need for a large capital injection as these assets age. My feeling is that most of these funds tend to be somewhat conservatively priced against that risk but clearly this is less than a few years ago. The NAV of all these funds has risen by 10-20 points over three years and they trade at a premium to NAV. I can't say I think BSIF is value at 122 to be honest. Nonetheless, is still offers a 5.4% yield. I would say that still beats, hands down, some unconstructed WT P2P loan at 7%.