NEPC’s Matt Ritter was quoted in a recent FundFire article to discuss how investment managers are reacting to shifts in opportunities in energy transition investing, as well as the importance of risk compensation and manager selection. View the article on FundFire’s site here.
The rapid growth of energy transition investing – focused on deals facilitating the shift away from fossil fuels and climate change-inducing technologies – has largely been an infrastructure asset class phenomenon, but now is increasingly sparking private equity transactions and funds.
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“Certainly, there are growing investment tailwinds,” said Matt Ritter, head of real assets at NEPC. “Energy transition… used to mean solar and renewable utilities. Now, there’s a broader set of opportunities… and the investment manager landscape is reacting to that shift.”
A new subset of deal types is complementing hard asset solar arrays and wind farms with companies specializing in power grid improvements, electric vehicle components, battery storage and carbon capture or sequestering, Ritter said.
“Those are investments that span the risk-return spectrum,” he said. “Some don’t look like traditional infrastructure investments, because maybe it’s an investment in a company. It’s also a different risk profile and cashflow profile.”
Read the full article on FundFire’s website here.