Gresham House acquiring Hazel Capital management business, launching new energy unit

Specialist alternative asset manager Gresham House has completed the acquisition of the asset management business of UK new energy infrastructure manager Hazel Capital, it announced on Tuesday.

The AIM-traded firm said that, in addition to the asset management business, Hazel Capital owns and manages several energy storage system or battery storage projects, and has successfully commissioned one of the UK's largest battery storage facilities near Bristol.

It has also exchanged contracts to acquire stakes in three of those operational and development stage battery storage projects, which would align the company with the Hazel Capital Management team and its clients.

The total consideration for the acquisition and investment was £2.6m, funded through a combination of cash from the company's balance sheet and newly issued shares.

That initially included £0.6m in cash for the acquisition of Hazel Capital's asset management business, plus an investment of £2m - comprised of £0.75m in cash and £1.25m satisfied through the issue of new ordinary shares at the prevailing share price as at completion of the project investments.

For the financial year to 30 April 2017, Hazel Capital's asset management business generated an operating profit of £0.9m, excluding all development profits.

In addition, as per its announcement on 17 October, Gresham House Asset Management - a wholly owned subsidiary of Gresham House - has been recommended by the boards and proposed as investment advisor, subject to shareholder approval, for two renewable energy VCTs managed by Hazel Capital.

The acquisition of Hazel Capital would add a portfolio of operating assets which - alongside the VCTs - will form a new division titled ‘Gresham House New Energy’, the board said.

It explained that the new division would, subject to shareholder approval from the VCTs, have an aggregated AUM in excess of £100m, plus a pipeline of development assets.

The division would be led by Ben Guest, Hazel Capital's managing partner, as well as Bozkurt Aydinoglu and Gareth Owen, and would leverage the specialist technical and investment expertise of the team to drive further organic AUM growth within Gresham House.

“The Hazel Capital team's skills and experience will significantly add to the Gresham House group,” said Gresham House CEO Anthony Dalwood.

“Gresham House New Energy had been identified as a strategic focus for the company and we launch with AUM of over £100m into an area with a significant growth opportunity through renewables and associated new energy infrastructure.

“Gresham House New Energy will leverage the specialist technical and investment expertise of the Hazel Capital team to drive organic growth, including new product launches, whilst further diversifying the Gresham House product portfolio.”

Ben Guest, managing partner of Hazel Capital, said the transaction was a “natural next step” for Hazel Capital.

“Our expertise in renewables and battery storage will complement Gresham House's existing strategies of private equity, infrastructure, strategic public equity and real assets,” Guest explained.

“At the same time, we will gain from the experience and skills of the wider Gresham House team and will be able to leverage the resources from being part of the Group's growing platform for differentiated investment strategies.”