Schroders Greencoat Launches UK's 1st LTAF

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by KnowESG,

Schroders plc

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Schroders Greencoat, a leading manager specialising in renewables and energy transition infrastructure under Schroders Capital, has announced the launch of the Schroders Greencoat Global Renewables+ Long-Term Asset Fund (LTAF).

This marks the UK's inaugural LTAF solely focused on renewable energy and energy transition infrastructure, presenting an opportunity for UK pension savers to invest in this crucial asset class. The fund offers stable, diversifying, and inflation-linked investment returns.

The newly introduced fund aims to invest in infrastructure supporting the energy transition across the UK, US, and Europe. It provides access to appealing, long-term investments in private markets, including wind and solar assets, as well as various energy transition assets like hydrogen, heating, and storage.

LTAFs are regulated investment vehicles designed to allow a broader range of investors with longer-term horizons to efficiently invest in illiquid and private markets. Particularly suitable for the UK defined contribution (DC) and UK charities markets, LTAFs offer savers access to previously untapped opportunities, including through defined benefit (DB) pension schemes.

The Schroders Greencoat Global Renewables+ LTAF extends Schroders Capital's commitment to delivering innovative products tailored to client needs. Following the launch of the UK's first LTAF, the Schroders Capital Climate+ LTAF last year, this new offering enhances the suite of private market solutions available to DC schemes and other clients.

Part of Schroders Greencoat's range of semi-liquid funds, the LTAF provides access to private assets investments with greater liquidity and operational simplicity. Managed by Schroders Greencoat alongside its Luxembourg-domiciled sister fund, the Schroders Capital Semi-Liquid Energy Transition Fund, the LTAF builds on Schroders' position as a market leader in offering structures for private assets.

Duncan Hale, Portfolio Manager at Schroders Greencoat, said:

“We are pleased to be introducing this groundbreaking LTAF, which, will offer investors a powerful combination of strong returns potential with a unique risk profile, while directing essential capital towards decarbonising and electrifying our energy sources.

“This new LTAF reflects Schroders Greencoat’s consistent track-record of being at the forefront of innovative private market offerings, which in this case also includes a diversified portfolio base. Alongside wind and solar, a dedicated portion of this portfolio also taps into newer technologies associated with energy-transition-related infrastructure, like hydrogen and district heating, which have the potential to generate superior returns across a longer period.”

Tim Horne, Head of UK Institutional Defined Contribution at Schroders, said:

“Schroders Capital now has two of the five authorised LTAFs currently available, putting us at the forefront of the evolving private market.

“With the DC market expected to make material investments into private markets over the coming years, the ability to access dedicated renewable energy and the energy transition exposure is an attractive and highly diversifying potential addition to DC members’ portfolios.

“It’s exciting to be able to offer DC members and other investors access to these assets, which meet both their need for stable long-term returns and sustainability goals.”

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Source: Schroders

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