Solar Fund wipeout raises hairs on the backs of investors’ necks

Investors are urging the manager of ASX-listed solar energy investment group New Energy Solar to waive a $10 million fee from the group, which is now in liquidation mode, after it failed to meet investment expectations.

But the fund’s manager – E&P Financial Group, chaired by former Essendon president David Evans and formerly known as Evans Dixon – plans to accept the fee despite pleas from investors and New Energy’s board, according to sources supporting it declined to be named for confidentiality reasons.

Solar should be a booming business, but Australia's only purely publicly traded group is in wind-up mode.

Solar should be a booming business, but Australia’s only purely publicly traded group is in wind-up mode.Recognition:Bloomberg

Unrest over New Energy Solar’s management has been growing for some time, with some investors claiming that E&P has been using the group like a “money cow”. They also claim $73 million in fees were siphoned from New Energy, which was once worth $300 million, over the course of its seven-year existence.

New Energy was listed on the ASX in 2015 as the first and only pure solar investment company. It was modeled after other successful groups. However, the company is currently on track to be delisted and wound up after failing to raise more capital to fund its expansion plans. According to some investors, New Energy was wound up after becoming entangled in the broader issues within the E&P business.

Formed from the ill-fated merger of wealth managers – Evans and Partners and Dixon Advisory – E&P was formerly known as Evans Dixon.

In August, New Energy announced that it had sold its 14 remaining solar plants to MN8 Energy, Goldman Sachs’ spinoff for renewable energy investments, for $245 million ($365 million). Shareholders will receive capital gains of up to 95 cents in tranches, which is still well below the fund’s current tangible net asset allocation of $1.12. As part of the sale process, E&P is eligible for a $10 million exit fee.

Sydney-based investment adviser Trevor Thomas, who has invested more than 350 clients in New Energy Solar, said he wrote to E&P’s CEO to request the waiver of the fee as a good faith gesture.

“New Energy failed in large part because of its involvement in the Evans Dixon mess, and it seems silly that Evans and Partners wouldn’t waive its final fee to lessen the loss to investors,” said the Ethinvest chief this imprint.

“The Investment Manager may have a statutory right to a final payment, but in my opinion there is no moral or ethical basis for doing so.” Solar Fund wipeout raises hairs on the backs of investors’ necks

Brian Lowry

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