Gresham House announced the proposed acquisition of renewable energy infrastructure money manager Hazel Capital.
The specialist firm said in an announcement on its website it had entered into exclusivity arrangements and conditional terms to acquire the manager, in a deal that is expected to be completed in the third quarter this year.
Hazel Capital advises on more than £100 million ($128.8 million) in assets. It runs venture capital trusts and enterprise investment schemes designed to generate attractive yields with downside protection provided by the backing of real assets.
A spokeswoman for Gresham House said Hazel Capital would be acquired from existing management.
The transaction is in line with Gresham House's strategy to grow organically and through acquisition. Gresham Housesaid in the announcement that the deal is “highly complementary” to its existing real assets division, and the objectives of its recently announced British Strategic Investment Fund. The fund focuses on three themes identified as being of strategic importance to the U.K. by the Chancellor of the Exchequer George Osborne in the 2016 Autumn Statement: innovation, housing and infrastructure.
Gresham House has a period of exclusivity until Dec. 31, in which to finalize its due diligence and terms of the proposed acquisition.
The announcement said Gresham House has also agreed, subject to due diligence, to provide growth capital via a secured loan to Hazel Capital for the exclusivity period, for up to £4.6 million.
“We see a substantial growth opportunity in renewables and new energy infrastructure-related assets, and today's announcement is the first step towards bringing a recognized expert investor in this growing sector into our group,” said Tony Dalwood, CEO of Gresham House, in the announcement. “Hazel Capital's success in generating market-leading returns through its VCT and EIS platform within the growth areas of infrastructure-related asset management, fits well with our strategy to develop our range of alternative and illiquid investment solutions for long-term investors.”
Further details could not be learned by press time.