According to a study conducted by the OECD, the worldwide demand for energy is on the rise. Emerging markets such as South America, Asia and Africa are expected to account for 90% of this demand by 2035. These markets reflect unique challenges as many countries lack the infrastructure for energy production with a significant number having no access to electricity consistently, or at all. With the development of renewable energy sources such as solar, which is becoming increasingly cost-efficient, this issue can be addressed.
The EMS Fund aims to provide investors who hold a long-term perspective with access to these emergent markets in the form of leasing/lending returns. To that end Invictus has partnered with the Sun Exchange which has an excellent track record in this sector. Returns earned will be re-invested (in the form of margin lending when assets are idle and/or additional solar projects), resulting in a compounding effect. The Fund's purchasing power also entitles it to discounts and lease-rate bonuses in accordance with the table below:
Historically, projects of this kind have enjoyed IRRs of 10-12%. The Fund will aim to optimize these returns through expert vetting, utilizing idle assets as well as minimizing the amount of time between lease payments.
The projects within the fund are analogous to annuity products from a cash flow perspective. Monthly income received will be used to reinvest in further projects, allowing for additional compounding effects on returns.
Additional Benefits for Investors
- Investors should also consider that in many jurisdictions investing through a fund structure is more tax-efficient than earning interest directly (which is commonly classified as income and subject to income tax).
- At this time, no performance or management fees will be collected by Invictus Capital.
- Solar power is fast becoming the dominant source of power generation. Contribute to this growth whilst assisting with the maintenance of the environment.
- Entry and exit liquidity is 24/7
In short, the EMS Fund intends to provide consistent (uncorrelated) returns for investors over the long-term, whilst concurrently supporting clean energy production and improving access to essential infrastructure for countless communities.