On June 8, the German Government announced the introduction of a EUR 2.3 billion p.a. tax on nuclear fuel. The tax is likely not linked to an extension of the nuclear generation fleet and will have a material negative impact on E.On. Due to the significant and unexpected deterioration of the regulatory environment the fund has closed its position in the company. The nuclear tax will lead to cuts in capex by the German utilities, which will lead to underinvestment in new baseload generation. Indirect beneficiaries will be hydro- and nuclear generators, which have exposure to German power prices and operate in stable regulatory environments. The fund’s holdings in CEZ, Fortum, BKW and Verbund fit that description.