Investment options in green energy firms

PERSONAL FINANCE: Your queries answered

Q

I wish to purchase shares in three companies: Glanbia, Open Hydro and Mainstream Renewable Energy. I phoned a stockbroker and they said they did not sell Mainstream Renewable shares.

I don’t know how to purchase stocks/shares. Do I approach another stockbroker or the companies? Is there a fee if I work through a stockbroker?

- Ms EC, Dublin

A

Mainstream Renewable Power and OpenHydro are two of a host of companies chasing profits in the green energy space. As with many young industries, there are a lot of companies with potential to make substantial profits in the future. Most will fall by the wayside – because their technology fails, their niche area within renewables (wind and wave respectively, in this case) loses support or because some rival company gets first mover advantage on them.

OpenHydro, in particular, is still testing its technology.

All in all, these are not risk-free investments; in fact, they would be considered to be at the riskier end of the investment profile and, in my opinion, would not be appropriate choices for someone who, by your own admission, knows little about investing directly in companies.

More importantly, from your perspective, neither is listed on a stock market. This doesn’t mean that they do not have investors, they do, but these are largely financial institutions or what are called “high net worth” individuals – people with significant sums to invest. Normally, such people will invest in companies like OpenHydro and Mainstream by taking part in a funding round organised by a finance house or by approaching the company directly.

Once invested, they are effectively locked in as the shares in these two companies do not trade on any stock market.

Exit from such investments is generally done when the company eventually floats on a stock market or is taken over by another firm. The alternative is to sell on to other existing investors in the company or outsiders looking to buy in, but there can be company rules governing this.

To save the blushes of the stockbroker, I have deleted their name, but they should certainly have been able to tell you all the above. It was unhelpful to state simply that they did not trade in one of the companies – especially when two of them are private businesses.

Of course, there’s nothing to stop you buying shares in Glanbia. Shares in publicly listed companies (plcs) are acquired through stockbrokers – who are licensed to trade in company stock.

Somewhere to store the deeds to my home

Q

I’ve recently got my house deeds from the bank where I had a mortgage. Where would you recommend it be kept?

- Mr TM, Dublin

A

The deeds to your property are important legal documents and must be stored carefully. You will not be able to sell the property in the future without them.

There is nothing to stop you keeping the deeds at home but I would not advise it. Most people rely either on their solicitor or their bank to store their deeds securely.

You can expect to pay a nominal sum for this service.

This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into. Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2. E-mail: dcoyle@ irishtimes.com