Foresight plans IPO as renewables demand rises

The firm will also look to use the proceeds to continue to buy other GPs in the infrastructure and private equity space, chairman Bernard Fairman told us.

London-based Foresight Group is planning an initial public offering on the city’s main stock market as it seeks to capitalise on the growing interest in renewables infrastructure.

Foresight did not disclose how much it would be seeking to raise from the offering, although it said in a statement that the offering would include a sale of shares by existing shareholders, with a smaller offering of new shares to be issued by the company. In total, Foresight expects half of the company’s share capital to be in public hands after the offering.

Foresight was founded in 1984 and now has £6.1 billion ($8.3 billion; €6.7 billion) of assets under management, including 2.7GW of renewable energy assets. Executive chairman and co-founder Bernard Fairman believes this has now grown to a size where an IPO is the logical next step.

“We want to increase our profile because there is no doubt we know what we’re doing and we do a good job. When you get above a certain size, it’s all about visibility,” he told Infrastructure Investor. “We think a main market listing will make quite a difference to our ability to raise cash. Renewable energy infrastructure is more and more in demand and the economics are in our favour. Solar, in particular is becoming a backbone energy producer and we think demand will go up and we need to raise more money.”

Fairman said the company had grown to the extent that the IPO was key to future growth, comparing the situation to Stockholm-based EQT’s similar offering in 2019, with the dynamics of the renewables market propelling Foresight even further.

“Right now, the market is looking favourably on businesses doing renewable energy infrastructure and have very strong ESG credentials. We have done so for many years, perhaps before anyone created the acronym,” he added.

Almost a third of Foresight’s renewables portfolio is comprised of solar assets in the UK, Continental Europe and Australia, and Fairman expects the proceeds of the offering to grow this part of its portfolio even further. However, he also said Foresight will continue its recent trend of acquiring existing GPs in the infrastructure and regional UK private equity space, which it began in recent years with the acquisitions of the JLEN Environmental Assets Group and the Pensions Infrastructure Platform in 2019 and 2020, respectively. Fairman also highlighted similar deals to the one last month, which saw Foresight invest in five biomethane compressed natural gas refuelling stations as part of what he said is a journey to the “ultimate destination” of hydrogen vehicle fleets, although he ruled out investing in the nascent technology in the near future.

“That may be 10 years off. When it comes to energy, we’re not a venture capital investor. We invest in infrastructure.”

Foresight said it raised gross funds of £516 million between March and September last year. It remains in market for its Foresight Energy Infrastructure Partners vehicle, a private fund which reached a €342 million first close last year, while its London-listed Foresight Solar Fund this week acquired a 98MW portfolio in Spain.