On a recent holiday with my family, I found myself close to the site of a wind farm in which we invest. The chance to take a first-hand look at the company in action was too appealing to miss – at Newton, on-the-ground visits such as this are a key part of our research and due diligence process.

I made a short video blog of my visit, you can watch it below:

a-windy-day-1At the wind farm, as you can see in the video, I had the chance to meet some key individuals in person – not just senior management, but also the engineers who service the assets and oversee their day-to-day operations. For example, I met one of the asset managers who explained some of the engineering challenges involved in managing a site such as this one. I also had an interesting chat with the CEO and one of the company’s non-executive directors on the importance of the board providing good challenge to the management team.  

Furthermore, meetings like these provide not just a chance to glean information on one specific company, but an opportunity to hear wide-ranging information on the whole industry, from the challenges faced by the component manufacturers to the effect of renewable-energy assets on the utility markets.

Wind farms such as these ones benefit from strong government subsidy support (as much as 50%), which helps ensure the cash flows are stable, with little sensitivity to the economic cycle – helping them to pay a sustainable dividend to investors. The other 50% of revenues from these assets comes from selling the power generated into the wholesale market. While the power generation does vary on a day-to-day basis, it is fairly stable over the long term.

a-windy-day-2It’s only when you visit sites such as these first hand that you fully appreciate the scale and complexity of these projects. It reiterated to me the diversification these robust, ‘haven-like’ assets might bring to a portfolio. The wind doesn’t care whether we are in a recession or not; these turbines will continue to turn and generate power on a fairly consistent basis, regardless of the economic backdrop.


Paul Flood

Paul Flood

Head of mixed assets investment

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