UK's first recycling fund opens to retail investors

The UK’s first recycling and composting fund has been launched to retail investors by waste management company New Earth Solutions (NES) and Isle of Man-based fund provider Premier Group.

NES said strict landfill diversion targets for local authorities combined with economic incentives for resource recovery and sustainable energy generation presented significant opportunities to waste management companies and the investment community.

The fund, which is listed on the Channel Islands Stock Exchange and is also available through a number of Sipp and offshore bond providers including Aegon Scottish Equitable International, Hornbuckle Mitchell, and Scottish Provident International, will invest directly in NES’s UK operations.

NES currently operates a Dorset facility which can process 50,000 tonnes of waste annually using proprietary composting technology which prevents potentially harmful bioaerosol emissions.

The fund will invest in the existing plant as well as 50 new £10 million plants over the next few years, including a Kent facility slated to open in September.

In addition to waste treatment, the technology captures recyclables such as plastics, glass and metals.

Impax Group, the UK’s largest quoted environmental investment management company, backed NES in February with a £4 million equity investment. Impax investment manager Jonathon Fogg said the technology was ‘proven, effective and efficient’.

Adrian Jones, financial director of NES, said the fund would help accelerate the development of sustainable waste management practices in the UK. According to the company over 75% of black bag waste ends up in landfills, making the UK the second worst offender in Europe.

Premier said the fund received £2 million on the first day of trading earlier this month.

NES said it anticipated returns of 12-15% per annum. Minimum investment is £10,000, or £5,000 through offshore bonds, with 100% of the subscription used to purchase shares.

The annual management charge will be 1.5%, with exit penalties on withdrawals over 5% each year reducing from 8% to 0% over 5 years.