Gresham House plc trading update

Gresham House plc H1 trading update

Gresham House (Gresham House plc, Gresham House, the Company or the Group) announces a trading update for the six-month period to 30 June 2022, with strong growth and delivery of strategy in H1 and AUM +11% to £7.3bn

Highlights

• Strong progress against the Group’s five year ‘GH25’ financial and strategic objectives, with AUM growth of £0.8bn to £7.3bn (+11%) in H1, from £6.5bn (31 December 2021), including organic growth of £0.5bn (+8%)
• Adjusted operating profit and margin expected to be at least in line with market expectations2 for the six months to 30 June 2022 and the full year to 31 December 2022
• Several significant fundraises in private asset funds completed, including a £150mn oversubscribed fundraise for Gresham House Energy Storage Fund plc (GRID) and a £65mn fundraise for UK shared ownership housing fund, Gresham House Residential Secure Income LP (ReSI LP)
• Net inflows to the Group’s open-ended equity funds of £70mn, despite strong macroeconomic headwinds and lower stock market valuations
• Fundraising closes for the Baronsmead and Mobeus VCTs of £70mn
• Completion of the acquisition of Burlington Real Estate in Ireland, which is already delivering growth in the Gresham House Commercial Property Fund
• £13mn development capital deployed by the Group to develop new energy projects to support wider business growth
• Strongest client pipeline since the management team launched GH25 in 2020, with new clients and identified commitment indications across funds including British Sustainable Infrastructure Fund (BSIF) II, both UK and international forestry funds, real estate, and battery energy storage systems

Trading review

Gresham House delivered a strong and resilient performance in H1, with adjusted operating profit and margin currently expected to be at least in line with market expectations at both the half and full-year 2022 results.

The Group continues to make good progress towards delivery of its GH25 financial and strategic objectives, despite the challenging backdrop including volatile equity markets, high levels of inflation, and rising interest rates.

This continued performance has largely been driven by the Group’s long-term and sustainability-focused private asset classes which are in areas of structural growth and typically less correlated with equity markets.

Funds raised

The Group has successfully exceeded its fundraising targets for H1 2022, contributing to an AUM increase to £7.3bn as at 30 June 2022 (31 December 2021: £6.5bn).

In May 2022, Gresham House Energy Storage Fund plc (LSE: GRID), the Group’s listed utility-scale battery energy storage fund, completed a significantly oversubscribed placing to raise £150mn.

Other notable fundraises include Gresham House Forestry Fund VI LP, which held a first close with commitments of £75mn from institutional clients, and £80mn raised in our affordable housing funds, comprising commitments to Gresham House Residential Secure Income LP of £65mn and an equity capital raise by Residential Secure Income plc of £15mn.

The Group also notes that it was pleased to see net-inflows of £70mn into its open-ended equity funds in H1 2022, and £70mn raised for the Baronsmead and Mobeus VCTs which achieved their maximum fundraising targets in the first quarter, despite strong macroeconomic headwinds and lower stock market valuations.

The growth in asset allocation to specialist alternatives continues alongside specific demand for our asset classes.

The pipeline of indicated commitments to the British Sustainable Investment Fund (BSIF) II, international and UK forestry funds and real estate funds in H2 continues to be strong.

International expansion

The Group has continued its international expansion in the period, completing the acquisition of Irish independent commercial property asset and development management company, Burlington Real Estate, in March 2022 for €1.8mn. This consolidated the partnership already existing in the award-winning Gresham House Commercial Property Fund. Gresham House in Ireland has already seen growth in this Fund in H1.

The Group’s international forestry activity also continued to grow, acquiring New Zealand forestry and carbon credit assets for £49mn on behalf of an institutional client.

The Group was also pleased to note GRID’s intention to expand internationally to capture the wider battery energy storage growth opportunity.

Development projects 

The Group has continued to deploy its balance sheet strategically into development projects, including investment of £13mn to develop battery energy storage and renewable energy projects.

The battery energy storage projects are part of the exclusive pipeline to be sold to GRID once operational and have  each delivered historic returns in excess of 30% IRR.

Tony Dalwood, Chief Executive of Gresham House, said:

“It’s pleasing to see Gresham House continuing to deliver excellent performance. Having grown AUM to £7.3bn, we are well placed to meet market expectations, and deliver against our objectives despite the macroeconomic challenges.”

“With several fundraising initiatives underway across our divisions, and a growing international presence, Gresham House is well positioned for the second half of 2022 to continue growing the business in line with our strategy.”

Past performance is not a reliable indicator of future performance. Capital at risk. 

1. Unaudited

2. Market expectations defined as broker reports that follow Gresham House plc as at 13 July 2022

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