None of the information provided is investment or tax advice. You should always read the associated risks before deciding whether to invest. These can be found on the product pages as well as in our risks overview. Please confirm you have read the information above.
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Don't invest unless you are prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong.
We believe there is power in diversification. Investing across different geographies, sectors and asset classes could help to lower the risk in your portfolio and increase its resilience in varying market conditions. Different sectors and assets typically respond differently to certain market conditions and a diversified portfolio can mean more consistent returns across your investments.
Diversification is at the heart of the Downing Estate Planning Service and our two underlying strategies: renewable energy and infrastructure, and asset-backed companies. Investors can state a preference for how they would like to split their funds but most elect for 50/50 across the two strategies.
Energy and infrastructure
Our energy and infrastructure strategy focuses on core renewables – solar, wind and hydropower – as well as gas peaking and battery storage projects.
Asset-backed
Our asset-backed strategy focuses on trading businesses that have tangible assets, backed by ‘bricks and mortar’. Examples include elderly residential care homes, special educational needs schools and lending to property developers.
Within each of the two core strategies we actively pursue further types of diversification, focusing on thematic and complementary investments. We believe that a well-diversified portfolio is essential for portfolio resilience and long-term success.
Assets in action – Examples of our recent strategic acquisitions
Through our active management of the Downing Estate Planning Service, we seek out attractive investment opportunities that align with our objectives for a diverse, well-rounded portfolio.
New solar asset
A new revenue stream for our energy and infrastructure strategy
Most investors recognise that diversifying across different technologies and geographical regions leads to more consistent energy generation. Substantial evidence supports the varying degrees of correlation – or lack thereof – in the renewable energy sector. This is easily seen when reviewing the Downing Estate Planning Service’s renewable energy portfolio’s monthly average generation:
Less commonly noted are the benefits of actively managing and diversifying revenue streams within the renewable energy sector. While selling energy to the market can be highly attractive to investors during periods of high prices, merchant power prices can be volatile as they are influenced by market dynamics and demand-supply fluctuations. The Downing Estate Planning Service is focused on capital preservation therefore managing this volatility is essential. Our strategy balances harnessing the potential benefit from merchant power prices with securing a substantial portion of fixed, inflation-linked revenue streams. Ways in which we can achieve this are by actively managing our revenue streams, either through the strategic acquisition of assets with fixed revenues, or by optimising existing assets to tap into alternative revenue sources.
An example is our strategic acquisition of an operational solar plant in Sleaford, Lincolnshire, which completed in June. The plant has been operational since July 2023 and is forecast to generate approximately 36 GWh per year – enough to supply electricity to 12,400 homes annually.
This new solar asset benefits from an inflation-linked 15-year contract for difference (CfD) commencing in 2025. A CfD swaps the merchant power price (the market price that fluctuates over time) for a fixed price, which acts as a safeguard against the fluctuations in the energy market.
Early years education acquisition
A new sector for our asset-backed strategy
Our asset-backed strategy seeks out businesses within sectors that have strong underlying demand drivers. These businesses often sit within highly fragmented markets, which help to create a sustainable flow of investment opportunities and a variety of potential routes to exit for the Downing Estate Planning Service.
In particular, we focus on needs-based, multi-site operating businesses spanning the full lifecycle of healthcare & education – from early years through to elderly care.
We are also supporting businesses and property developers to address the shortage of general and specialist housing across the UK. We believe these sectors and the opportunities we pursue fit well with the Downing Estate Planning Service's capital preservation strategy and help us to meet our target returns.
In this strategy we think of diversification in various ways including by sector, geography, revenue stream, management team and different demographic segments of the UK population.
The Downing Estate Planning Service has expanded its portfolio with the strategic acquisition of an early years education business that encompasses five nurseries in South West London. Whilst Downing has experience in this sector, it is the first acquisition in this sector for the Downing Estate Planning Service. We believe this sector provides an attractive opportunity for investors and is supported by shifting household dynamics and strong government funding through financial subsidies.
This exemplifies the strategic advantage of thematic investing. The team’s extensive experience in asset-backed businesses has been effectively leveraged to now include children’s nurseries into the portfolio.
We will seek further acquisitions within early years education as we look for additional opportunities that provide family-orientated environments and high standards of care and education.
The Downing Estate Planning Service
The Downing Estate Planning Service aims to provide investors with access to Business Relief-qualifying companies, which can provide inheritance tax relief after two years (if the shares are held upon death of the investor). Our diverse, mature portfolio targets steady returns of 3% to 4.5% (net of Downing fees) and allows investors to retain access and control over their assets, subject to liquidity. Downing has been managing estate planning solutions since 2007 and now manages £860m of AUM within the Downing Estate Planning Service, on behalf of over 5,300 investors (as of July 2024).
Important notice: This document has been prepared for retail investors and investment professionals and has been approved and issued as a financial promotion under section 21 of the Financial Services and Markets Act 2000 by Downing LLP. We recommend investors seek professional advice before deciding to invest. Tax treatment is dependent on the individual circumstances of each investor and may be subject to change in the future. Downing is a trading name of Downing LLP. Downing LLP is authorised and regulated by the Financial Conduct Authority (Firm Reference No. 545025). Registered in England and Wales (No. OC341575). Registered Office: 6th Floor, St Magnus House, 3 Lower Thames Street, London EC3R 6HD.
