GHE.L Regulatory News (GHE)

19 May 2017

Gresham House Plc ("Gresham House" or "the Company")

(AIM: GHE)

Proposed Acquisition of Hazel Capital LLP, the Renewable Energy Infrastructure Asset Manager, and Loan Investment

Gresham House, the specialist asset manager, is pleased to announce that it has entered into exclusivity arrangements and conditional heads of terms (the "Agreement") to acquire Hazel Capital LLP ("Hazel Capital"), a leading UK asset manager of new energy infrastructure.

The proposed acquisition, expected to complete in the third quarter of this year, is in line with Gresham House's strategy to grow both organically and through acquisition, and is highly complementary to Gresham House's existing Real Assets division and the objectives of the recently announced British Strategic Investment Fund. The acquisition is intended to be funded using shares issued at a premium to the current share price, plus a deferred earn out in cash and shares. Gresham House has been granted a period of exclusivity until 31 December 2017 to finalise its due diligence and the terms of the proposed acquisition.

Hazel Capital advises on more than £100 million of assets with a product portfolio including Venture Capital Trusts ("VCT") and Enterprise Investment Schemes ("EIS") designed to generate attractive yields with downside protection provided by strong real asset backing. The Hazel Renewable Energy VCTs launched in 2010 have achieved market leading performance, with net returns of over 50% before any tax benefit considerations.

In conjunction with the Agreement and following ongoing due diligence, Gresham House has agreed to provide growth capital in the form of a secured loan ("the Loan") to Hazel Capital during the exclusivity period for up to £4.6 million, including arrangement fees, to develop its immediate pipeline of Energy Storage System ("ESS") projects. The Loan accrues interest in-line with Gresham House's criteria and is secured against Hazel Capital. Full repayment is due on or before 31 December 2017.

Further announcements will be made as appropriate in due course.

Tony Dalwood, CEO of Gresham House, said:

"We see a substantial growth opportunity in renewables and new energy infrastructure-related assets and today's announcement is the first step towards bringing a recognised expert investor in this growing sector into our Group. Hazel Capital's success in generating market leading returns through its VCT and EIS platform within the growth areas of infrastructure related asset management, fits well with our strategy to develop our range of alternative and illiquid investment solutions for long term investors."

Ben Guest, Managing Partner of Hazel Capital, said:

"In Gresham House, the Hazel Capital team has found an exciting new home to realise its future growth potential in the new energy and infrastructure markets. The complementary skills, entrepreneurial drive and overlapping investment philosophy ensures an excellent fit. We are very excited about our future as part of Gresham House."

ENDS

Background

Hazel Capital is an FCA authorised asset management business focused on the rapidly growing new energy infrastructure sector and was founded ten years ago by Ben Guest after a successful fund management career at Lazard Asset Management and hedge fund manager Cantillon Capital. Since 2010, it has developed or acquired c.300 megawatts (MW) in the UK solar market across 28 projects.

In 2015, Hazel Capital entered the battery storage or ESS market as well as the electric car charging infrastructure markets. Hazel Capital has been developing ESS projects, combining battery technology and engines, for the purpose of offering "Grid Enhancement" services to the National Grid which are expected to grow to at least 1GW over the next ten years. There is also the opportunity to offer alternative services to the National Grid including load/peak shifting and other services which have a potential market size significantly above 1GW.

In 2017, Hazel Capital is expecting to commission three ESS projects serving the National Grid, totaling 85MW. The first 20MW project became commercially operational in May 2017.

Each ESS project is grid-connected, typically with a lease of 25 years which matches a planning permission for the same duration. Each project is expected to operate throughout this period subject to market conditions and enjoys multiple revenue streams.

Further details can be found on Hazel Capital's website: www.hazelcapital.com

Note

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain. If you have any queries on this, then please contact John-Paul Preston, Chief Operating Officer of the Company (responsible for arranging release of this announcement) on +44 (0) 20 3837 6270.