Fund Solutions

This Week’s Fund News: MSIM Targets Mitigation with PE Platform

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including MSIM, Schroders Capital, Eurazeo, Low Carbon and BluPine Energy.  

Morgan Stanley Investment Management (MSIM) has launched the 1GT Growth-Oriented Private Equity Platform, which will invest in companies seeking to mitigate the effects of climate change. Investments will collectively avoid or remove one gigatonne (GT) of CO2 equivalent emissions by 2050. The platform is part of MSIM’s US$200 billion alternative investments business, and will focus on private companies based primarily in North America and Europe with products or services helping to reduce their respective clients’ carbon footprint. It has deployed nearly US$600 million in capital since 2015 and, alongside other impact-oriented investment vehicles, MSIM plans to raise an additional US$1 billion. Vikram Raju, MSIM’s Head of Climate Investing and the 1GT Platform, said: “We need to seek climate goals that are tangible rather than anecdotal and ambitious rather than tangential. We believe that in order to catalyse meaningful progress in climate solutions, a significant portion of financial incentives should be linked to such climate goals [and] the measurement of those goals should be transparent to limited partners. With our 1GT goal and linked financial incentives for the team, we have endeavoured to do just that.”  

The UK Real Estate Impact Fund, a place-based impact investment strategy, has been introduced by UK-based asset manager Schroders Capital. The fund aims to generate positive social impact outcomes across the UK by investing in the creation of affordable homes, workplaces and mixed-use town centre re-purposing projects to address social deprivation and inequality, while delivering strong financial returns. It will predominantly target areas defined as deprived by the UK government and will address social challenges faced by a range of beneficiaries, including low-income families, community groups, social enterprises and SMEs. The fund’s objectives are aligned with seven of the UN Sustainable Development Goals (SDGs). Chris Santer, Schroders Capital’s Real Estate Team’s Impact Fund Manager, said: “Through our focus on deprived areas and working to understand the needs of local communities, we believe we can deliver place-based real estate solutions driving social change together with long-term financial value for investors.” 

Private markets asset manager Eurazeo has announced the first close of its Eurazeo Transition Infrastructure Fund at €210 million. Labelled as Article 9 under the EU’s Sustainable Finance Disclosure Regulation, the fund has received a €75 million investment from the European Investment Fund, adding to Eurazeo’s own €100 million commitment and additional commitments made by institutional investors. The fund has been seeded with three investments from European companies operating in different sub-sectors: Ikaros Solar, a Belgian rooftop solar developer; Resource, a joint venture to develop a plastic waste sorting plant in Denmark; and Electra, a French-headquartered electric vehicle charging point operator. Alain Godard, the European Investment Fund’s Managing Director, said: “Contributing to the EU’s green transition is a priority for the EIF. We are therefore very glad to be doing our part and investing in a fund that will make real, tangible and meaningful steps in the direction of meeting the EU’s climate targets.” 

Global renewable energy company Low Carbon has commenced construction of four large-scale solar farms in the Netherlands. The solar farms will have a combined installed capacity of 53.1 megawatts-peak (MWp) from over 88,000 solar modules. In total, the facility is expected to generate a minimum of 1 gigawatt (GW) of new renewable energy capacity, with the potential to provide clean, affordable power to more than 360,000 homes and avoid 308,000 tonnes of CO2e. The projects are the first to be financed by the renewable energy investor’s multi-bank debt facility, established in August with NatWest, Lloyds Bank and AIB. The solar farms are the latest projects in the company’s expanding international portfolio, scaling up the pursuit of its ambition to install 20 GW in renewable energy capacity by 2030. All solar farms have been developed by LC Energy, Low Carbon’s joint venture with engineering firm Qing and one of the leading renewables developers in the Netherlands. To deliver the projects and limit environmental interference, Low Carbon has partnered with the German-based solar specialist BELECTRIC. Roy Bedlow, Low Carbon’s CEO and Founder, said: “[These projects] are the latest instalment in our growing international portfolio, and further evidence of our ambition to create 20 GW of renewable energy capacity by the end of this decade.” 

BluPine Energy, a portfolio company of global sustainable infrastructure investor Actis launched earlier this year, has acquired a 404 MWp operating solar portfolio from the Atha Group. BluPine energy is targeting 4 GW capacity of utility-scale solar, wind and storage projects through a buy and build strategy with both government and C&I PPAs across India, with this portfolio acquisition enabling BluPine to continue Actis’ efforts to create sustainability leaders of scale in the Indian renewables sector. Actis has previously built two Indian renewable IPPs, Ostro Energy and Sprng Energy. Actis has committed to invest as much as US$800 million in BluPine through Actis’ Energy 5 Fund, which represents US$6 billion of investable capital, and is focused on investing in global energy transition opportunities. Sanjiv Aggarwal, Actis’ Energy Infrastructure Partner, said: “With energy demand increasing by 5-6% every year, it’s vital that India can meet the electricity needs of its population. BluPine Energy will build wind, solar and storage capabilities that deliver clean, reliable power across India with a core focus on sustainability and positive impact.” 

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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