Institutions raise exposure to renewables

SRIThe proportion of European institutional investors with exposure to renewable energy assets has almost doubled over the last year, according to research by alternative asset manager, Aquila Capital.

The survey carried out in February this year found 39% of European institutional investors now have some exposure to renewable energy assets or infrastructure, up from 21% last year. The proportion investing in farmland has also risen sharply, to 14% from only 3% last year.

In general, of the 61 institutional investors surveyed across Europe, 73% said they were optimistic about real assets, compared to 41% a year ago. Furthermore, the proportion that were “very positive” nearly doubled.

Aquila Capital’s research says real estate is the most popular type of real asset, with 86% of investors in the survey holding some exposure to it.

Oldrik Verloop, co-head of hydropower at Aquila Capital, says: “The current low growth and low interest rates that characterise the world economy at present means institutional investors are looking to alternative investments to provide reliable, inflation-adjusted returns.”

A paper published earlier this year by Aquila Capital, entitled Real Assets – The New Mainstream, concluded that institutions globally will increasingly divert investments into real assets due to insufficient returns from equities and bonds.

Aquila Group has €7.9 billion in assets under management, including around €1.9 billion in solar, wind and hydropower.

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