Schroders Capital receives approval to launch first renewables and energy transition dedicated Long-Term Asset Fund

Schroders Capital receives approval to launch first renewables and energy transition dedicated Long-Term Asset Fund

S&I Report

Schroders Capital today announces it has received regulatory approval from the UK’s Financial Conduct Authority to launch its second Long-Term Asset Fund (LTAF), the first dedicated to renewable energy and the energy transition.

The newly approved LTAF is intended to focus on renewable energy and energy transition aligned infrastructure investments and will be managed by Schroders Greencoat, the renewable energy specialist of Schroders Capital. The Schroders Greencoat LTAF is the first LTAF authorised in the UK to have an investment remit solely focused on renewable energy and energy transition-aligned infrastructure.

This announcement follows on from the recent launch of Schroders Capital Climate+ LTAF, the UK’s first LTAF. LTAFs are regulated open ended investment vehicles designed to enable a broader range of investors, with longer term horizons, to invest efficiently in illiquid and private assets.

Following this announcement, Schroders Capital will have two of the first three LTAFs authorised in the market. The investment in Schroders Capital’s LTAF platform consolidates its market leading position in offering structures which provide greater access to private assets, particularly for the UK defined contribution (DC) market. Going forward, LTAFs may also have a role to play in the UK wealth market, subject to the outcome of the ongoing FCA consultation on broadening access to long term asset funds.

Richard Nourse, Managing Partner, Schroders Greencoat, said:

“In March 2013, Schroders Greencoat pioneered the renewable energy infrastructure investment trust market with the launch of Greencoat UK Wind PLC, still the sector leader and now a £3.6bn company on the edge of the FTSE 100. Today, with increased focus on the DC pension market, we are again pioneering innovative ways to make investment into renewable energy and other energy transition related infrastructure accessible to as wide a range of investors as possible.

“With the imminent launch of the Schroders Greencoat LTAF we look forward to being able to offer DC investors the opportunity to make attractive and impactful long-term investments into the energy transition.”

Tim Horne, Head of UK Institutional DC, Schroders, said:

“Broadening the opportunity set for savers needs to be a priority for the DC market, particularly in private assets which have the potential to help DC investors achieve their aims of a good outcome in retirement. Schroders continues to lead the market in DC innovation, having two of the three authorised LTAFs. The growth and investment into our LTAF platform is just one way we are helping to meet the needs of UK retirement savers.”

Duncan Hale, Private Markets Group, Schroders Greencoat, said:

“For too long DC pension scheme members have had their noses pressed up against the glass, looking in at other types of investors enjoying the benefits that come from investing in illiquid assets. We are excited about the ability to offer access to renewable energy and energy transition related infrastructure assets to DC members widely, not only due to the attractive risk and return metrics they provide but also their ability to reflect members’ sustainability requirements. This could only be possible due to both the regulatory progress made through the LTAF regime, as well as the innovative work Schroders Capital and Schroders Greencoat have done to put themselves at the forefront of this market evolution.”

With $91 billion [1] of assets under management, Schroders Capital provides investors with access to a broad range of private asset investment opportunities across the likes of real estate, private equity and infrastructure. Schroders Greencoat is the renewable energy arm of Schroders Capital, managing £8.8 billion [2] of assets of renewable energy and energy transition related infrastructure.

[1] Assets under management as at 31 December 2022 (including non-fee earning dry powder and in-house cross holdings)

[2] Assets under management as at 31 December 2022  (calculated as the sum of market capitalisation for listed funds and aggregate equity commitments to the private markets funds.)

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