Monday, June 24, 2024

Australian Ethical in partnership to launch infrastructure debt fund

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Ethical asset manager Australian Ethical has launched an infrastructure debt fund, in association with specialist Infradebt. 

The Australian Ethical Infrastructure Debt Fund will provide capital for key Australian projects spanning renewable energy, social infrastructure and property projects, with a social or environmental benefit. 

Chief investment officer, Ludovic Theau, said the fund will be at the forefront of capital deployment into Australia’s renewable energy transition. This includes loans to the Yarranlea Solar Farm to implement solar and battery projects in remote communities, and standalone battery projects such as the Genex Bouldercombe in Queensland.

Infrastructure debt specialist, Infradebt, has already funded more than 40 renewables projects and said infrastructure debt typically offers stable and predictable cash flow and diversification, as well as a way to hedge market volatility and inflation. 

“We estimate that debt capital will provide 50–60 per cent of the total capital expenditure that’s required to meet Australia’s renewable energy transition targets. 

“Given Australia is aiming to increase its renewable energy generation from 39 per cent today to 82 per cent by 2030, Australian Ethical considers its expansion into infrastructure debt as an important growth opportunity that will serve a dual purpose – of delivering good risk-adjusted returns and contribute towards meeting these targets,” Theau said. 

“This partnership with Infradebt, also a leader in its field, allows us to bolster our investment capabilities by bringing in-depth expertise across new asset classes,” he added.

Infradebt investment director and co-founder, Alex Ramsey, said: “We’re pleased to be partnering with Australian Ethical on a product that will be integral to building Australia’s green transition. The energy transition is of paramount importance to our community. It will be complicated and challenging, and the fund will allow investors to access the requisite investment capability to participate and make a meaningful contribution.”

Announcing its quarterly results last month, the firm said its funds under management are approaching $10 billion after seeing net flows of $145 million in the three months to 31 December. 

FUM was $9.6 billion, up by 5 per cent from $9.2 billion in the previous quarter. This was divided between $2 billion in managed funds and $7.6 billion in superannuation.

However, managed funds saw net outflows of $7 million, which the firm attributed to “cautious investor sentiment relating to broader market volatility”.

 

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