Infrastructure investments can contribute to an appropriate risk/return profile of institutional portfolios, a more sustainable production chain and a circular economy, says TKP Investment’s Harm Zwier Medendorp.
TKP Investments (TKPI), part of Aegon Asset Management, are closely involved in advising Aegon NL on sustainable infrastructure investments, performing due diligence on behalf of the insurer. The alternative investments team have overseen a number of responsible investments in recent years, aimed at providing solid returns for investors, whilst providing benefits for wider society.
Below, Harm Zwier Mendendorp, Head of Alternative Investments at TKPI, highlights a number of sustainable infrastructure projects taking place within Aegon NL held funds, including the opening of a new plastic recycling plant.
DWS PanEuropean Infrastructure Fund II
"The PanEuropean Infrastructure Fund II seeks to make investments in a diversified portfolio of infrastructure assets and businesses in Europe. The assets in the portfolio are expected to have low sensitivities to changes in interest rates, medium sensitivity to GDP changes and somewhat more to inflationary pressures. In addition, PEIF II investments are innovative where possible.
"One example of this innovation is the opening of sustainable waste processor Attero's new polymer recycling plant in Wijster, The Netherlands. The plastic recycling facility's opening, which will be unveiled by First vice-president European Commission Frans Timmermans on 15th March 2019, coincides with a recent boost in the market for recycled content plastics."
BlackRock Global Renewables Power Fund II
Another example of a sustainable infrastructure investment held by Aegon is the BlackRock Global Renewables Power Fund II. "The BlackRock team that runs Global Renewables Power Fund II focuses on investments in renewable energy, especially on-shore wind and solar. The GRPFII fund now has an exposure of approximately 61% to wind and 39% to solar, with the geographic split tilted towards the US (47%) Japan (18%) and Norway (16%).
"Against the Global Real Estate Sustainability Benchmark (GRESB) infrastructure ESG benchmark, several of the assets in the fund scored well. The GRPFII fund exploits new markets, for example Japan, where they see enormous opportunities to scale alternative energy resources. Japan is a nice example when realizing what happened there in Fukushima. This triggered an energy transition in which BlackRock plays a good role."