Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Questions raised over UK's state-backed fund for electric car charging

Questions raised over UK's state-backed fund for electric car charging

Labour criticises tender as firm running £400m investment fund awards millions to company it part-owns
The private equity firm appointed by the government to manage as much as £400m in investment in electric car charging points has awarded millions of pounds to a company in which it holds a controlling financial interest.

Zouk Capital is the largest shareholder in charge point builder Instavolt, having made an £18m investment in the company. Now Zouk has chosen Instavolt as the charge point fund’s first beneficiary, a decision criticised by the Labour party.

The Conservative government announced its intention to establish a charging infrastructure investment fund in the autumn budget of 2017, amid plans to encourage drivers to choose electric cars, which emit lower or zero carbon dioxide . The £400m government-backed fund initially aims to deliver 3,000 additional rapid-charge points for electric cars, more than doubling the number of electric car charging points in the UK.

However, the fund’s rollout, which hoped to match £200m in private-sector investment with public money, was delayed by almost two years, amid difficulties in recruiting an investment manager.

The government finally awarded the mandate to manage the fund to Zouk Capitalin September. It also announced that the fund had raised the first £70m, with half provided by the government and half coming from Abu Dhabi-based renewables investor Masdar.

Zouk declined to say exactly how much of the first £70m had gone to Instavolt. However, Samer Salty, Zouk’s founder and managing partner, said it was “less than 50%”. Salty expects to invest more of the fund into other companies by the end of the year.

The government faced criticism from a Labour MP for allowing the arrangement. Rebecca Long-Bailey, Labour’s shadow business secretary, said the UK needed urgent and significant investment in charging infrastructure, rather than deals between private companies.

She added that a future Labour government would invest £3.6bn in publicly owned charging infrastructure.

The government said that Zouk’s choice of Instavolt allowed the fund to “put capital to work quickly”, and that an “independent fairness opinion” by accountancy firm PwC had been “positive”. The government and PwC declined to provide the opinion or its reasoning to the Guardian.

A spokesperson for the The Infrastructure and Projects Authority, the government body in charge of major investments, said: “Instavolt has ambitious plans for rolling out well-needed rapid chargers across the UK, and has a strong track record in this.

“The government has followed a transparent and due process in the selection of its fund manager for the charging infrastructure investment fund, and all investment decisions have been taken in line with industry best practice.”

In payment for managing the fund, Zouk will receive a percentage of the assets under management, plus a significantly higher performance fee if the returns beat a benchmark. Salty declined to comment on the fees charged, but said it was lower than the “2% and 20%” model – 2% of the assets under management and 20% of the profits – common in the private equity and hedge fund industries.

Zouk will wait for at least five years before trying to recoup its equity investment in Instavolt, either by finding a buyer or floating it on a stock market, Salty said.

Salty said similar deals were common within private equity and there had been the “right transparency” throughout. The arrangement was made after “very extensive due diligence” by both Masdar and the government, he added.

“There is a conflict of interest but conflicts are there to be managed,” Salty said. “They are constantly being managed across the board.”

Zouk holds sole responsibility for deciding future investments from the fund, which could go to Instavolt or competitors.

Instavolt was founded in November 2016 by energy industry executives Tim Payne and Adrian Pike with backing from Zouk. It has not yet made a profit. It lost £4.3m in the year to 31 March 2019, up from £3.2m the year before.

Providing 3,000 charge points will represent a significant step up for Instavolt. The company only built its first charging station in September 2017, and has so far installed about 400.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
×