Octopus Renewables Trust Reduces Management Fees to Align with Shareholder Interests

• Old basis: fee applied to 99.46 pence (NAV per share).
• New basis: fee applied to the average of share price and NAV – roughly (70.2p + 99.46p) / 2 = 84.83 pence.

On those figures, ORIT says the change would cut the annual fee by approximately £0.7 million versus the previous agreement. Importantly, because of the cap, even if the share price rallies above NAV, the fee will not exceed the old NAV-only calculation.

Why this matters for ORIT shareholders

• Aligns fees with market reality: many listed renewables trusts have been trading at discounts. Basing fees partly on market cap shares that pain with the manager and cuts costs while a discount persists.
• One-way protection: the cap guarantees shareholders will never pay more than the old NAV-based fee. You get the upside of lower fees in a discount, with no downside if the market re-rates the shares.
• Direct link to share price performance: the Board explicitly wants a “clear focus on enhancing the Company’s share price performance.” This structure nudges incentives in that direction.
• Cash flow benefit: a c. £0.7 million annualised saving (based on Q2 2025 levels) is modest but tangible, improving ongoing cost efficiency.
• Signals responsiveness: the move acknowledges “broader challenges facing listed renewables infrastructure companies” and shows ORIT is willing to adjust its cost base.

Key numbers and dates you should know

Old fee rates	0.95% of NAV up to £500 million; 0.85% of NAV above £500 million
New fee base	Equal weighting of quarterly average market capitalisation and quarterly published NAV
Fee cap	Lower of the new blended calculation and the old NAV-only calculation
Illustrative inputs	Average share price 70.2 pence; NAV per share 99.46 pence (Q2 2025)
Illustrative saving	Approximately £0.7 million per annum vs previous agreement
Effective date	1 November 2025
Termination notice period	12 months; during notice, fee based solely on NAV

What to watch next

• Discount to NAV: if the shares continue to trade below NAV, the new approach should keep fees lower than before. If the discount narrows, the fee base rises, but cannot exceed the old NAV-only level.
• Timing: changes kick in from 1 November 2025. There is no immediate impact before then.
• Notice period nuance: in the event of termination, the fee reverts to NAV-only during the 12-month notice period, so the discount-linked saving would not apply in that scenario.
• Capital markets event: the Board plans to update on interim results, operations and strategy on Tuesday 23 September. Expect more colour on portfolio performance and the path to closing the discount.

My take: a clean, shareholder-friendly tweak

This is a sensible, targeted change. It reduces fees in precisely the market conditions that have been frustrating investors – a persistent discount to NAV – while protecting shareholders if sentiment flips. The cap is the clincher, ensuring fees never exceed the old method.

It will not, on its own, close ORIT’s discount or transform returns. But it is a positive signal on alignment and cost discipline, and it moves the dial in the right direction without adding complexity or risk. Taken together with operational updates due in September, this is the kind of incremental progress the market wants to see.

Net result: lower fees when you need them most, no higher fees when things improve. That is hard to argue with.