The move - the latest example of deal-making in overdrive in the asset management industry this year - sees Schroders jumping on two of the sector’s largest trends: greater demand for renewable energy assets and the expansion of the private capital sector.
Schroders is to acquire a majority shareholding in Greencoat Capital, one of Europe’s largest renewable infrastructure managers, for £358 million ($473 million).
The London-based wealth and investment management house hopes to grow its sustainable investment offering through Greencoat, which valued it at around $477 million.
Greencoat, which has £6.7 billion of AuM at 30 November 2021, has pioneered large-scale renewable energy infrastructure investing in listed and private formats, delivering compound AUM growth of over 48 per cent per annum over the last four years to 31 March 2021, Schroders said in a statement.
Over the past 12 months the renewable investor achieved net new commitments for private funds and equity raises for listed funds of £1.6 billion (1 December 2020 to 30 November 2021), Schroders said, adding that both firms are aiming for global leadership in the fast-growing investment sector.
Greencoat, which capitalises on two significant growth opportunities, including the global transition to net zero with US and European markets for renewable energy assets, is forecast to grow by more than $1 trillion to 2030, Schroders said. The ESG investor also utilises accelerating institutional client demand for environmentally positive products in order to meet their own sustainability commitments.
As part of Schroders, Greencoat’s growth and its offering to clients will be significantly enhanced, benefitting from the fund manager's distribution reach, sustainability capabilities, management experience and brand. Greencoat. which will become part of Schroders Capital, Schroders’ private markets division, will be known as Schroders Greencoat.
Established in 2009, Greencoat focuses on renewable energy infrastructure investing, including wind, solar, bioenergy and heat; it operates nearly 200 power generation assets across the UK, Europe and the US, with an aggregate net generation capacity of over three gigawatts.
Greencoat’s investor mandates typically comprise permanent or 25-year capital, reflecting the longevity of the assets in which it invests. It manages the listed renewable infrastructure investment companies in sterling (Greencoat UK Wind plc) and euros (Greencoat Renewables plc) and has some of the UK’s leading pension funds amongst its fast-growing £2.9 billion private market business.
Its management team is led by its four founders Laurence Fumagalli, Bertrand Gautier, Stephen Lilley and Richard Nourse who will continue to run the business day to day, Schroders said.