Nick Dignam from Fortitude Investment Partners shares insights with Lachlan Maddock from Fortitude Investment Partners on how a diversified portfolio in mid-market private equity is structured. The Inside Adviser
The world of alternative investments is at a crossroads. As markets defy expectations and liquidity concerns take centre stage, investors find themselves forced to rethink how they deploy capital in an increasingly complex environment.
Federation gets real with SARA
After what has been a busy (and impressive) year for relative new-comer Federation Asset Management, it could have been forgiven for putting the cue in the rack come Christmas. Yet the group, led by ex-Macquarie banker Cameron Brownjohn, just launched what may be an Australian first: a pure-play investment fund investing in the renewable energy transition.
Federation this week launched the Sustainable Australian Real Asset Trust, or SARA, which comes hot on the heels of its success in acquiring a stake in, and subsequently buying-out, wind farm specialist Windlab in June this year. The new fund has serious ambitions, targeting a total size of $750 million and having already secured the backing of Nasdaq-listed specialist asset manager, GCM Grosvenor.
The announcement comes as discussion around Environmental, Social and Governance or ESG-focused investing reaches fever pitch. 2020 may well be remembered as the year that “greenwashing” became a household term (at least in financial industry households), with every asset manager seeming to add an ESG assessment to their investment strategy, but little evidence of the impact of this new focus.
The same could not be said for Federation and its head of renewable energy, Stephen Panizza. Before partnering with Brownjohn and Neil Brown, Panizza was the chief investment risk officer of the Clean Energy Finance Corporation (CEFC). The CEFC is known as Australia’s “green bank,” with Panizza’s role there being to assess every renewable energy investment proposal: his pedigree therefore is clear.
Commenting on the new fund, Panizza confirms that “SARA will invest in renewable energy projects and developments, energy storage systems and other sustainable infrastructure projects and developments across Australia and New Zealand.” One of the key tasks for the fund, which has already seen 10% of the targeted capital committed, will be funding the pipeline of projects coming out of the acquired Windlab group.
At the time of acquisition, most pundits focused on Windlab’s existing renewable energy and wind assets, but this left the group’s pipeline of potential development opportunities as a bonus for the buyers. The launch of SARA offers institutional and other investors a choice of investment options for varying risk profiles.
Commenting on its upfront commitment to SARA, Dhruv Narain, managing director of infrastructure investments at GCM Grosvenor, highlights Federation’s ability to combine “investment returns that are very attractive on a globally benchmarked and risk-adjusted basis, with directing capital towards a socially responsible cause.”
