Fund expansion aimed at environmental solutions: an inside look at LPPI's Environmental Opportunities Fund creation
In a significant step towards addressing climate change, Local Pensions Partnership Investments (LPPI) has launched an Environmental Opportunities Fund. The fund, which aims to make companies more efficient in terms of energy and other inputs, and reduce waste, is explicitly focused on tackling climate change [1].
The fund, initially backed by LPFA and Lancashire County Pension Fund, has a broad remit to invest across infrastructure, private equity, private credit, venture capital, and natural capital [2]. The focus is on investments that support climate adaptation and environmental sustainability, with a particular emphasis on unlocking opportunities in climate adaptation [1].
Portfolio Manager Helena Threlfall, with over a decade of experience in private equity, real assets, and natural capital, leads the fund's core team [2]. The team is evaluating potential investments in carbon credits, but with a focus on those that have a genuine climate angle [1].
Threlfall's approach is cautious, particularly towards the current carbon credit market due to its volatility and reputational risks [1]. Instead, the team is considering thematic opportunities such as biodiversity, resource efficiency, and nature-based solutions [1].
The fund is not interested in investments that do not contribute to net zero. For instance, if trees are still being cut down without any changes in practice, these investments are not considered as contributing to net zero [1].
Natural capital investments are under scrutiny due to the risk of traditional strategies being rebranded without genuine environmental benefits [1]. However, Threlfall believes that the thematic opportunities offered by the fund can provide environmental benefits, operational improvements, and financial gains for portfolio companies [1].
The first external manager for the fund has already been appointed, and the fund will invest through a mix of third-party managers and co-investments [2]. Threlfall remains optimistic about the direction of the energy transition, despite geopolitical uncertainties and energy firms reducing their investments in renewables [2].
LPPI, a member of the infrastructure platform GLIL, has a history of investing in climate solutions [2]. The fund's launch marks a significant commitment to tackling climate change and promoting environmental sustainability.
Sources: [1] Financial Times [2] Pension Funds Online
- The Environmental Opportunities Fund, launched by Local Pensions Partnership Investments (LPPI), not only invests in natural capital but also focuses on thematic opportunities such as biodiversity, resource efficiency, and nature-based solutions, aiming to provide both environmental benefits and financial gains for portfolio companies.
- The fund, which is backed by LPFA and Lancashire County Pension Fund and has a broad remit to invest across various sectors, is explicitly focused on climate adaptation and environmental sustainability, avoiding investments that do not contribute to net zero and instead preferring those with a legitimate climate angle.
- In the context of real estate, the fund's focus could extend to investments that prioritize energy efficiency and waste reduction, as these strategies align with the fund's aim of making companies more environmentally friendly and combating climate change.
