Prestige Funds’ credit vehicle takes in £100m

The Prime Alternative Finance fund has a pipeline of projects worth roughly £500m and the firm is close to launching a Sharia-compliant follow-on.

Prestige Funds’ open-ended Prime Alternative Finance vehicle eclipsed the £100 million ($136 million; €112 million) mark for capital raised in 2020, founder Craig Reeves told Agri Investor.

The 2018-vintage fund is a project finance strategy and is fully invested across 10 government-backed on-farm bioenergy projects, which use farm and food waste to produce renewable energy.

The firm has identified a pipeline worth around £500 million in the space, of which Prestige hopes to capture roughly £200 million over the next two years, Reeves said.

“The opportunity is immense. We’ve got 600 biogas plants across the UK and you could easily have 1,200 or 2,000 plants. The demand’s there, the waste is there, the situation and environment is all there. The things this fund is doing, we’ve done that for the best part of a decade. We’ve done 5 to 7 percent [returns] for 12 years in a row,” Reeves explained.

Prime Alternative Finance delivered returns of 7 percent in 2020 with a 1 percent volatility, Reeves confirmed. “We have very little correlation to traditional bonds and equities, we’ve demonstrated resilience and we’ve demonstrated our low correlation credentials.”

The fund is backed by a range of investors including family offices, pensions and corporates. Prestige expects to receive a €16 million commitment from an Italian pension fund, Reeves confirmed. A $10 million equivalent investment from a Middle Eastern investor is also close to being secured.

The firm is also launching a Sharia-compliant version of the vehicle “as we speak,” Reeves said, which will also target long term investors, have an open-ended structure and will invest in on-farm UK bioenergy projects.

“[Bioenergy facilities] give the big farm a whole new revenue stream, so it’s great for them. What it also does it often serves a community of 10, 20, 30 smaller farms, and gives them somewhere they can send their waste,” Reeves explained.

“We’ve dealt with pet food companies, turkey producers and all sorts of different groups who send their waste to the plant. And of course, these plants also generate a nitrate rich digestate, which is an alternative to manmade fertilizer, so they get cheap or free fertilizer and they get a very cheap alternative to sending it to landfill at £100 per ton.”