Mike Thatcher investigates Wandsworth Pension Fund’s planned £80m investment in non-traditional renewable energy projects.
Wandsworth Pension Fund (WPF) has agreed to invest up to £80m in two energy transition funds based on non-traditional renewable projects such as battery storage and green hydrogen.
WPF, which also includes Richmond Council’s Pension Fund, said that, subject to due diligence, it intended to invest in the Octopus Energy Transition Fund and the Sandbrook Climate Infrastructure Fund. A maximum of £50m will be invested in one fund, with the total across both not exceeding £80m.
Paul Guilliotti, WPF assistant director (financial services), told Room151 that Wandsworth already had significant investments in traditional renewable energy projects – involving generation – and was looking for strong returns and the opportunity to diversify its portfolio.
“Our approach was not aimed at investing in sustainable assets at any cost. First and foremost, it was diversifying and adding in something different to our return profile,” he said.
Guilliotti said he was expecting “punchy” returns on the investment of between 12% and 16%.
Due diligence
He suggested that WPF had “committed with a soft C rather than a hard C” on the investment, and the final go-ahead would be determined by the due diligence process.
The Octopus fund will focus on hydrogen, the grid, storage, supply chains, and local renewable generation, while the Sandbrook fund will focus on generation, grid, storage, supply chains, and energy efficiency.
Wandsworth’s total fund value is £2.8bn. It has set a net-zero target of 2050, with the goal of achieving a 60% reduction in emissions by 2030.
Guilliotti discussed WPF’s approach at Room151’s LGPS Investment Forum on 2 November at the London Stock Exchange.
