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Activist investor tries to close clean-energy fund

by Robert St George on Mar 07, 2014 at 11:28

Activist investor tries to close clean-energy fund

Richard Bernstein, manager of the Crystal Amber trust, has moved to wind up a clean-energy fund in which he invests.

Bernstein (pictured) acquired a 10% stake in Leaf Clean Energy late last year, but has concluded that its ‘current board is not acting in the best interests of the shareholders of Leaf as a whole’.

Crystal Amber has therefore tabled a resolution for an extraordinary general meeting proposing that Leaf ‘be placed into orderly run off’.

Leaf’s share price fell by 29% last year, as cheap shale gas in the US and solar overcapacity worldwide depressed the renewable energy industry.

Its managers have acknowledged that ‘the short-term outlook remains challenging’, but see ‘brighter prospects’ for the long term as the planet demands more clean energy.

Crystal Amber noted that Leaf now traded at a 47% discount to its last reported net asset value, and added that it was ‘baffled’ by Leaf’s running costs ‘given all but three of Leaf’s investments are passive’.

In the year to 30 June 2013, Leaf’s administrative expenses totalled more than £3 million – equivalent to 2.8% of its net asset value.

In response to Crystal Amber, Leaf told the stock market: ‘The board of Leaf notes the announcement by Crystal Amber Fund Limited and will be consulting with shareholders in the coming days. The board will make a further announcement in due course.’

Bernstein has a history of activism with companies he holds, most famously having tried to oust the chairman of film studio Pinewood Shepperton, Michael Grade.

His Crystal Amber fund has performed strongly over the past three years, returning 86% compared with 61% from the FTSE 250 excluding investment trusts index.

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