Schroders Greencoat has launched a long-term asset fund (LTAF), which it says is the first to focus exclusively on renewable energy and energy-transition infrastructure, aimed at UK defined contribution (DC) pension funds and charities.
The Schroders Greencoat Global Renewables+ LTAF will target wind, solar, hydrogen, heating and storage assets across the UK, US and continental Europe.
LTAFs are regulated, open-ended investment vehicles that were launched by the UK to help DC pension funds invest in illiquid asset classes.
Schroders said the new fund was a “landmark opportunity for UK pension savers to invest in this strategically important asset class while benefitting from stable, diversifying and inflation-linked investment returns”.
In 2023, Schroders Greencoat launched Climate+ LTAF, the UK’s first LTAF, followed shortly by Aviva Investors’ Real Estate Active LTAF, its first fund under the LTAF regime. Earlier this year, Schroders Greencoat also launched a “semi-liquid” energy-transition fund.
Duncan Hale, portfolio manager at Schroders Greencoat, said: “This new LTAF reflects Schroders Greencoat’s consistent track record of being at the forefront of innovative private-market offerings, which in this case also includes a diversified portfolio base.
“Alongside wind and solar, a dedicated portion of this portfolio also taps into newer technologies associated with energy-transition-related infrastructure, like hydrogen and district heating, which have the potential to generate superior returns across a longer period.”
Tim Horne, head of UK institutional defined contribution, said Schroders Capital now had two of the five authorised LTAFs currently available, “putting us at the forefront of the evolving private market”.
Horne added: “With the DC market expected to make material investments into private markets over the coming years, the ability to access dedicated renewable energy and the energy transition exposure is an attractive and highly diversifying potential addition to DC members’ portfolios.
“It’s exciting to be able to offer DC members and other investors access to these assets, which meet both their need for stable long-term returns and sustainability goals.”
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