Fund Solutions

Brunel Continues Sustainability Drive with Infrastructure Portfolio Launch

‘Cycle 2’ to focus on primary funds, tactical co-investment and secondary opportunities. 

The Brunel Pension Partnership has announced the launch of its Cycle 2 Brunel Infrastructure Portfolio, establishing two new vehicles for the fund, managed by StepStone Infrastructure and Real Assets (SIRA).  

To effectively employ Cycle 2 capital, a new £470 million fund will focus on renewable energy opportunities and has been launched alongside a £370 million ‘generalist’ fund focused on sustainable infrastructures, such as heating, power and transport.  

Cycle 2 has so far made three primary fund commitments with three leading managers: Copenhagen Infrastructure Partners IV, Brookfield Asset Management IV Renewable Sidecar and Capital Dynamics Clean Energy Infrastructure Fund X.  

“We believe it is crucial that investment is directed towards sustainable projects globally, to achieve the long-term objectives of our clients, support economic growth and work towards achieving the UN Sustainable Development Goals (SDGs),” said Sofia Deambrosi, Brunel’s Infrastructure Investment Principal.  

“Thanks to LGPS pooling and the appointment of SIRA, our clients benefit from resilience to sustain net return outcomes whilst diversifying their exposure to assets, sectors and asset managers,” Deambrosi continued. A significant bonus of this arrangement is that our clients now benefit from two sources of scale advantage in fee and term negotiations – LGPS aggregation and StepStone aggregation. They also benefit from the might of a global infrastructure team to co-invest. 

Cycle 2 and Cycle 1 (launched a few weeks apart) have respective 50% and 40%-plus commitments to the clean energy transition, providing clients with ESG-focused funds that will add to their building of Paris-aligned portfolios and will continue to generate returns as well.  

“Our clients asked us to provide them flexibility to invest and meet their individual infrastructure objectives,” added Richard Fanshawe, Head of Private Markets at Brunel.  

Building on Brunel Cycle 1

Cycle 1 featured the launch of Brunel’s £1.2 billion Sustainable Equities Fund, which aims to focus on investing in companies with strong ESG credentials. So far, the Cycle 1 portfolio has made eight primary fund commitments and one tactical investment involving managers from Capital Dynamics, NTR, Vauban and elsewhere.

Since 2018, Brunel has secured over £1.3 billion of commitments to infrastructure investment across both cycles. Brunel’s focus centres on clean energy generation, storage and energy transition-enabling assets. 

“In line with Brunel’s objectives, we will continue to target responsible investing with a clear focus on sustainability and climate change as well as other considerations, especially during the challenges of Covid-19. In line with Cycle 1, we remain focused on working closely with the Brunel team to access the best opportunities and partners in the market to provide long term, sustainable value for Brunel’s clients,” said SIRA Principal David Beamish. 

Brunel is one of eight pooled Local Government Pension Scheme funds in the UK.  

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