Fundraising problems aren't the media's fault

It is easy to blame the media when things don’t work out.

The rise of extremist political parties, panic over pandemics and other things we don’t like. Yet this ignores the real reasons these things happen.

The tendency to point the finger at the media when things go wrong is why it is easy to be cynical about the statement from Temporis Capital regarding challenges experienced during a recent fundraising.

If you haven’t read it, Temporis claimed that negative coverage of wind farms in the UK may have harmed a recent clean energy fundraising. The firm was looking to raise £20m for its existing Ventus VTS Plc (VEN) and Ventus 2 VCT Plc trusts, to invest in UK wind and hydro schemes. In the event, it raised £4m.

But it seems unlikely that negative press reports directly contributed to this.

The more conservative parts of the UK media have long been hostile to wind farms, just as they have been in North America and Australia. This hasn’t got any worse recently, and there is no reason to believe a fundraising now would be more impacted now than in 2013.

What has changed in the UK over the last couple of months is that the Conservative Party has stepped up its anti-wind-farm rhetoric. Communities secretary Eric Pickles extended the period during which he has final say over new wind farms to the 2015 general election; and after that, the Conservatives have mooted a ban on all new onshore wind farms.

The media reported these stories, but it is the government’s attitude to wind farms that is more likely to affect investors. And it is right that investors know about this.

So let’s set aside the point about the media and look at other possible reasons that investors might have passed up on the opportunity to invest with Temporis.

First, it is worth noting that the fund plans to invest in wind and hydro projects, yet many investors remain unconvinced on the precise workings and profitability of hydro. It’s natural for people to avoid deals they don’t understand, particularly with new technology.

Second, Temporis was looking to raise a relatively small amount of money. It may seem counterintuitive but, as history shows, it is often more difficult to raise smaller pools of capital, since the demographics of the investor base are markedly different and the individual pay-off often significantly reduced.

Remember, as the fund raising by John Laing Environmental Assets has shown this year, there’s no shortage of capital. It raised £160m, against an aim of £170m.

And perhaps we also have to look at the way in which the opportunity was communicated and sold. This element of fund management has become critical.

Get it right and investor clarity and confidence grows. Get it wrong and the fund only ever serves to muddy the waters. The communications made timed tocoincide with the 2014 Budget having been a case in point.

Naturally, there may well be other reasons at play here – and of course, it’s painfully easy to sit on the sidelines and proffer comment.

Nevertheless, with fresh capital having been poured into an increasingly diverse pool of listed renewable energy opportunities, the need for funds to work hard to engage and interact with prospective investors is becoming increasingly apparent.

It is easy to blame the media when things don’t work out.

The rise of extremist political parties, panic over pandemics and other things we don’t like. Yet this ignores the real reasons these things happen.

The tendency to point the finger at the media when things go wrong is why it is easy to be cynical about the statement from Temporis Capital regarding challenges experienced during a recent fundraising.

If you haven’t read it, Temporis claimed that negative coverage of wind farms in the UK may have harmed a recent clean energy fundraising. The firm was looking to raise £20m for its existing Ventus VTS Plc (VEN) and Ventus 2 VCT Plc trusts, to invest in UK wind and hydro schemes. In the event, it raised £4m.

But it seems unlikely that negative press reports directly contributed to this.

The more conservative parts of the UK media have long been hostile to wind farms, just as they have been in North America and Australia. This hasn’t got any worse recently, and there is no reason to believe a fundraising now would be more impacted now than in 2013.

What has changed in the UK over the last couple of months is that the Conservative Party has stepped up its anti-wind-farm rhetoric. Communities secretary Eric Pickles extended the period during which he has final say over new wind farms to the 2015 general election; and after that, the Conservatives have mooted a ban on all new onshore wind farms.

The media reported these stories, but it is the government’s attitude to wind farms that is more likely to affect investors. And it is right that investors know about this.

So let’s set aside the point about the media and look at other possible reasons that investors might have passed up on the opportunity to invest with Temporis.

First, it is worth noting that the fund plans to invest in wind and hydro projects, yet many investors remain unconvinced on the precise workings and profitability of hydro. It’s natural for people to avoid deals they don’t understand, particularly with new technology.

Second, Temporis was looking to raise a relatively small amount of money. It may seem counterintuitive but, as history shows, it is often more difficult to raise smaller pools of capital, since the demographics of the investor base are markedly different and the individual pay-off often significantly reduced.

Remember, as the fund raising by John Laing Environmental Assets has shown this year, there’s no shortage of capital. It raised £160m, against an aim of £170m.

And perhaps we also have to look at the way in which the opportunity was communicated and sold. This element of fund management has become critical.

Get it right and investor clarity and confidence grows. Get it wrong and the fund only ever serves to muddy the waters. The communications made timed tocoincide with the 2014 Budget having been a case in point.

Naturally, there may well be other reasons at play here – and of course, it’s painfully easy to sit on the sidelines and proffer comment.

Nevertheless, with fresh capital having been poured into an increasingly diverse pool of listed renewable energy opportunities, the need for funds to work hard to engage and interact with prospective investors is becoming increasingly apparent.

It is easy to blame the media when things don’t work out.

The rise of extremist political parties, panic over pandemics and other things we don’t like. Yet this ignores the real reasons these things happen.

The tendency to point the finger at the media when things go wrong is why it is easy to be cynical about the statement from Temporis Capital regarding challenges experienced during a recent fundraising.

If you haven’t read it, Temporis claimed that negative coverage of wind farms in the UK may have harmed a recent clean energy fundraising. The firm was looking to raise £20m for its existing Ventus VTS Plc (VEN) and Ventus 2 VCT Plc trusts, to invest in UK wind and hydro schemes. In the event, it raised £4m.

But it seems unlikely that negative press reports directly contributed to this.

The more conservative parts of the UK media have long been hostile to wind farms, just as they have been in North America and Australia. This hasn’t got any worse recently, and there is no reason to believe a fundraising now would be more impacted now than in 2013.

What has changed in the UK over the last couple of months is that the Conservative Party has stepped up its anti-wind-farm rhetoric. Communities secretary Eric Pickles extended the period during which he has final say over new wind farms to the 2015 general election; and after that, the Conservatives have mooted a ban on all new onshore wind farms.

The media reported these stories, but it is the government’s attitude to wind farms that is more likely to affect investors. And it is right that investors know about this.

So let’s set aside the point about the media and look at other possible reasons that investors might have passed up on the opportunity to invest with Temporis.

First, it is worth noting that the fund plans to invest in wind and hydro projects, yet many investors remain unconvinced on the precise workings and profitability of hydro. It’s natural for people to avoid deals they don’t understand, particularly with new technology.

Second, Temporis was looking to raise a relatively small amount of money. It may seem counterintuitive but, as history shows, it is often more difficult to raise smaller pools of capital, since the demographics of the investor base are markedly different and the individual pay-off often significantly reduced.

Remember, as the fund raising by John Laing Environmental Assets has shown this year, there’s no shortage of capital. It raised £160m, against an aim of £170m.

And perhaps we also have to look at the way in which the opportunity was communicated and sold. This element of fund management has become critical.

Get it right and investor clarity and confidence grows. Get it wrong and the fund only ever serves to muddy the waters. The communications made timed tocoincide with the 2014 Budget having been a case in point.

Naturally, there may well be other reasons at play here – and of course, it’s painfully easy to sit on the sidelines and proffer comment.

Nevertheless, with fresh capital having been poured into an increasingly diverse pool of listed renewable energy opportunities, the need for funds to work hard to engage and interact with prospective investors is becoming increasingly apparent.