This page provides a deeper look at the key sectors within Fern Trading – the portfolio company held by OITS and OITSPlus portfolios – and the factors influencing performance and valuations today.
Renewable energy: cash generative assets
- Fern has a large diversified renewable energy portfolio with a value of around £1.1bn, comprising over 200 assets across four countries and six generation technologies.
- The portfolio generates strong long term cash flows, a significant portion of which is government backed and index linked.
- Wholesale energy prices have shown significant volatility since 2020, with extreme spikes driving periods of relative outperformance, followed by some underperformance as prices normalised.
- Active asset management, including the French windfarm re-powering project, which is extending asset life and materially increasing output, adding both long term value and durability of income.
Real estate: focus on residential living
- Real estate exposure is focused on residential living sectors, through both owned housebuilding and integrated retirement living and a residential lending business.
- Structural demand for high-quality UK housing remains strong, driven by population growth.
- Recent years have seen lower sales volumes due to higher interest rates, but activity is now recovering, supported by recovery in mortgage activity.
- Elivia Homes and Rangeford Retirement Villages are building in areas of high demand and low supply and are operationally mature, with experienced management teams.
- The lending business continues to generate strong returns and actively manages credit issues where they arise, supported by a large, multi-skilled team.
Fibre: most challenged sector, with definitive actions underway
Fern has two core fibre businesses: Vorboss, an enterprise fibre network in London and AllPoints Fibre, which has passed well over half a million premises.
With the capex heavy build phase (which has been a drag on performance) now largely complete, the priority is driving commercialisation of both businesses and capitalising on the copper-to-full fibre migration – one of the largest structural transitions in telecoms – to generate strong recurring income.
To help address performance challenges, we made several important changes in 2025, focused on strengthening leadership, cost control and adjusting the direction of certain parts of the business:
- We appointed Adam Dunlop, the former CEO of TalkTalk Consumer, as an Octopus operating partner and Executive Chairman of Fern’s fibre businesses. He is a hugely experienced telco executive with deep sector experience managing strategic partnerships with major UK fibre network businesses.
- With Adam’s input, All Points Fibre has refocused on its wholesale strategy with its ‘Aquila’ platform, which aggregates major fibre networks such as Openreach, CityFibre, and BT Wholesale, along with its own infrastructure – allowing its customers to gain national full fibre reach through a single wholesale contract. It is positioned as a differentiated and superior offering in the market.
- Finally, we made the tough decision to stop some of our non-core fibre sector activities, including closing Vitrifi.
We are confident in our team, and our strategic focus to drive better outcomes from this part of the portfolio.
Key risks to bear in mind
- Investments made through OITS and OITSPlus are high risk. The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.
- Tax treatment depends on individual circumstances and tax rules could change in the future.
- Tax relief depends on portfolio companies maintaining their qualifying status.
- The shares of unquoted companies could fall or rise in value more than shares listed on the main market of the London Stock Exchange. They may also be harder to sell.
- For OITSPlus investors, the benefits offered by Octopus’ Insurance Policy only apply to eligible deaths. Ineligible deaths, or a misrepresentation in the health declaration could result in the Insurer refusing to settle a claim under the Insurance Policy.
