One of the UK’s largest hedge funds is making a strategic push into investment in renewables, and is set to launch its clean energy fund towards the end of this year.
Lansdowne Partners will launch the dedicated fund in the fourth quarter, in response to customer interest in socially responsible investment and what they say is an undervalued sector.
The FT reports that the company will buy long positions in companies that manufacture equipment used to generate clean energy, providers of new energy technology and other operators in the renewables sector.
While several private equity firms, including Carlyle and KKR, are also making a push into the renewables sector, few hedge funds have strategies that focus solely on the industry.
Global clean energy investment has risen steadily over the past decade, from $62bn in 2004 to a record $329bn last year, according to the Bloomberg New Energy Finance research group.
The global climate change accord struck in Paris in December has bolstered the renewable energy sector, as have falls in the costs of solar panels and other green power generation equipment.
The Lansdowne Clean Energy Fund will be a long-only equity product investing in clean generation equipment, new energy technologies, electricals, renewables operators, electrical infrastructure and power generators. The fund will only apply to companies that are on a sustainable development path from an environmental perspective.
The new fund is a natural extension of the Lansdowne Energy Dynamics Fund, which was launched by Lansdowne in January 2015.
The Lansdowne Energy Dynamics Fund returned 14.8 per cent and had a cumulative return of 8.1 per cent since its launch in January 2015.
The newly-launched Clean Energy Fund is set to focus on mature companies and complemented with next generation growth companies. It will invest predominantly in developed markets, with the scope to invest in Asia and Emerging Markets if the right opportunities present themselves.