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Universities scheme sells most of its stake in BlackRock new energy trust

Leading pension fund USS exits listed alternative energy vehicle

The £34bn (€39.4bn) Universities Superannuation Scheme (USS) has almost completely sold its shareholding in BlackRock New Energy Investment Trust Plc, the giant asset manager’s London-listed alternative energy vehicle.

According to a filing, USS has reduced its holding in the £84m trust from just above 19m to 0.2m shares, leaving it with a stake of just 0.089%.

The scheme, the main fund for higher academic staff in the UK, declined to comment on the reasons for the sale.

The stake had formed part of a renewables and cleantech portfolio worth around £250m at USS, alongside investments with Impax Environmental Markets, Hg Capital, Climate Change Capital and others.

Shares in the trust are currently trading at around 35.5 pence, down 46% from the level five years ago and more than 60% from October 2000 when the trust was launched.

The net asset value (NAV) for the trust has also lost almost the same amount for both periods. By contrast, the FTSE World index, Morningstar’s benchmark for the trust, has gained around 40% since the financial crisis of 2008 and 7% since October 2000.The trust – managed by Robin Batchelor and Poppy Allonby of BlackRock Investment Management – was set up to invest in companies that specialise in renewable energy technology. Some of its biggest holdings include Swiss engineering firm ABB, Portuguese wind farm developer EDP Renovaeis, US auto component and battery maker Johnson Controls and French electrics firm Schneider. It recently shifted its stance to focus more on energy efficiency as well as energy infrastructure and natural gas.

Last July shareholders in the trust voted overwhelmingly to have the right to withdraw their cash in 2014.

Simon White, head of investment trusts at BlackRock, said this did not mean the trust would be liquidated, noting that some investors may elect to remain.

Major shareholders in the trust have included Boston-based Weiss Asset Management (13% stake), 1607 Capital Partners (7%), BlackRock itself with 6% and UK insurer Legal & General with just over 3%.

Last month BlackRock, the world’s largest asset management company with $3.7trn in assets under management, made its first direct investment in UK wind parks. It set up a renewable power investment partnership with Ireland-based NTR in 2011.