Fund managers line up for high-yielding energy company subsidiaries
www.sustainability.thomsonreuters.com | Published 10 October 2014
By David Randall
(Reuters) – The hunt for dividend yield is pushing U.S. fund managers into an unproven new offshoot of the alternative energy industry.
Yield companies – commonly called “yieldcos” – are spinoffs of alternative energy companies that own assets such as wind or solar farms and pay investors dividends out of the cash flow generated by long-term contracts to sell power to utility companies. Though many investors have never heard the term, yieldcos are popping up in the portfolios of some of the most widely-held mutual funds in the United States.