Greencoat UK Wind PLC's (LSE:UKW) management fee amendment announced today is a highly shareholder-friendly move, says US bank Jefferies.
It is likely as a proactive concession ahead of the fund triggering a discontinuation resolution for the second year running, the bank added.
“Given UKW's current 21% discount to NAV, the switch to using market cap as a fee basis will lower run-rate ongoing charges to c.75bps and be very modestly accretive to dividend cover.
“More importantly, as the flagship fund in the renewable sub-sector, it arguably places pressure on others to follow suit, particularly in light of another round of discontinuation resolutions due to be triggered across the space.”
Buy is the bank’s view. Shares rose 0.3% to 125.8p.