Clwyd and Environment Agency funds back Threadneedle low-carbon real estate vehicle

The Clwyd Pension Fund and the Environment Agency Active Pension Fund have made equity commitments to a low carbon real estate trust offered by UK fund manager Threadneedle Investments in conjunction with property firm Stanhope and advisory body the Carbon Trust.

The two local authority pension schemes with £1.1bn (€1.2bn) and £2.1bn in assets respectively have made the commitments in the Low Carbon Workplace Trust, which was launched in 2010. Clwyd has said its commitment was £5m.

“This strategy is extremely relevant in both promoting responsible investment, which we are committed to under our Sustainability Policy, and importantly providing occupiers with efficient modern workspace and lower occupancy costs, and importantly providing occupiers with efficient modern workspace and lower occupancy cost,” said Clwyd Pension Fund Manager Phil Latham. The investment was consistent with the fund’s aim to work with fund managers in both ‘real assets’ and ‘alpha seeking alternatives’ who can deliver superior returns “through investment in environmental and sustainable projects”.

Dawn Turner, who recently took over from Howard Pearce as Head of Pension Fund Management at the Environment Agency, said: “As active members of the Institutional Investors Group on Climate Change (IIGCC) and supporters of the Global Real Estate Sustainability Benchmark (GRESB), we are very pleased that the first new commitment under our new real asset portfolio is an investment in LCW.”Threadneedle said the trust “harmonises the demand for energy efficient buildings with the desire for a socially responsible real estate source of alpha [market outperformance]”.

Since launch, the trust has acquired and refurbished four projects to Carbon Trust standards with more projects in the pipeline. Threadneedle, which has more than £5.6bn in property assets, has a total of £84bn under management; it is part of New York-listed financial services group Ameriprise Financial.

“This strategy is extremely relevant in both promoting responsible investment”

The fund’s investment target is to generate profits of 15% on cost of end development and subsequently to outperform the IPD Quarterly Index Total Return for the Office Sector by 1% per annum.

In April, the Clwyd fund announced it had made two £5m commitments to the agriculture sector via GMO Farmland Optimisation Fund and Insight Global Farmland Fund. It also put £5m into a shipping fund managed by Marine Capital. A follow-on investment of £6m was also made in Ludgate Environmental Fund 2. LCW fund information