Foresight Group shares slip despite asset, earnings growth

(Sharecast News) - Foresight Group shares were in the red on Tuesday morning even after it reported higher assets and earnings in its first half, supported by strong fundraising into retail vehicles and continued appetite for specialist real asset strategies. The FTSE 250 investment manager's assets under management rose 4% to £13.7bn in the six months to 30 September, while funds under management edged up 1% to £9.6bn.

Total revenue increased 11% to £81.5m and core EBITDA before share-based payments grew 6% to £30.6m, although the core margin slipped two percentage points to 37.6% due to outflows in its capital management arm.

The group raised £223m into higher-margin retail products and secured €505m of commitments for its Foresight Energy Infrastructure Partners II fund, completing the first phase of fundraising.

The vehicle subsequently invested £210m alongside another Foresight-managed fund to acquire Harmony Energy Income Trust, marking further expansion into UK battery storage.

However, the Foresight Capital Management division posted net outflows of £155m, partially offsetting positive investment performance of £56m.

Recurring revenue remained high at 87%, in line with the firm's target range, while real asset exits continued to contribute to fee income.

In Australia, the disposal of Zenith Energy generated £3.4m of performance fees after achieving a valuation materially above the fund's prior holding value.

Post period end, additional exits included a partial sale of global transport business Kinetic at a premium to carrying value and the first afforestation exit for Foresight Natural Capital, which realised a 1.8x multiple on invested capital.

Executive chairman Bernard Fairman said the firm had "benefitted from sustained investor appetite for our specialist retail and institutional products," noting that £566m had been raised over the past 12 months into higher-margin retail strategies, a 31% increase on the prior period.

He added that the first phase of institutional fundraising for FEIP II had been completed at €505m, while the group's regional private equity strategy had launched its 16th fund with a £90m first close.

Fairman said fundraising momentum was supported by investment performance and successful real-asset disposals.

"With our focus on long duration capital, we are confident that the group's diversified strategies can deliver further growth as we remain on track to achieve our guidance to double core EBITDA pre-SBP in the five years to 2029," he added.

The board declared an interim dividend of 8.1p per share, up 9% on the previous year, payable on 30 January.

At 1040 GMT, shares in Foresight Group Holdings were down 5.96% at 434p.

Reporting by Josh White for Sharecast.com.