Gore Street Energy Storage (GSF), the UK’s first listed ‘battery’ fund, has scraped on to the London Stock Exchange after raising just £30 million after costs in its initial public offer (IPO).
With industrial partners NEC Energy Solutions and Nippon Ko subscribing for £14 million of shares, that left other investors contributing just £16 million in what has been a difficult period for IPOs and investment company launches.
Gore Street originally sought to raise at least £75 million from investors with a £100 million preferred target, but last month slashed the minimum to £30 million with a £35 million target, having earlier extended the deadline for subscriptions.
Alex O'Cinneide, managing partner of Gore Street Capital, the fund’s investment adviser, claimed he was ‘delighted’ with the result given the challenging IPO market brought on by volatile stock markets this year.
‘The completion of our fundraising confirms our belief that the energy storage market provides a tremendous opportunity for the fund’s investment strategy and I look forward to updating the market with the progress that I am sure we will achieve,’ said O'Cinneide.
The £30 million fund raise is less than a third of the minimum needed to attract wealth managers, who are the big buyers of investment trusts today.
Faced with the prospect of a small fund, Gore Street last month promised to raise its first-year target dividend from 3p to 4p before upping it to 7p per share in year two.
The money raised will be invested in a network of big lithium batteries in which renewable power can be storied and supplied to the grid, generating annual total returns of 10-12% before costs, according to the company.
Broker Stockade Securities advised the company. Trading in its 30.6 million 100p shares will start on Friday.