Green energy investment trusts face investor votes on whether they should continue trading as a prolonged slump in share prices hampers access to capital and presents challenges for the green transition. High interest rates have lured investors into other assets while onerous fee disclosure rules have made trusts appear comparatively expensive, weighing on the sector and pushing them to trade at a steep discount to net asset value.
Hedge funds have begun to circle, with Elliot taking a 5 per cent stake in the Scottish Mortgage Investment Trust a week after it announced a £1bn share buyback in an attempt to prop up its share price. The impact on green investment trusts is particularly significant given the need for new funds to build wind farms, solar panels and more to meet the country’s legally binding net zero targets.