CP3, UK/Asian govt climate fund, issues mandate for asset manager as part of UN $100bn plan: P8/P80

Fund-of-funds house sought for sizeable Asian green infrastructure portfolio.

CP3, the Climate Public-Private Partnership fund being developed by the UK Department for International Development (DIFID) as part of United Nations commitments of $100bn in financial flows from developed to developing countries by 2020, is tendering for its first mandate for asset managers.
CP3, in partnership with the Asian Development Bank (ADB) is seeking an investment house to run a private equity, green infrastructure fund of funds in Asia, with co-investment rights for other capital providers such as pension funds, in what could be a significant allocation of capital.
At last December’s COP16 UN climate conference in Cancún, agreement was reached to commit $30 billion in ‘fast start’ finance from industrialised countries to support climate action in the developing world by 2012 and $100 billion in long-term funds by 2020.
CP3, which is also receiving advisory input from multilateral institutions such as the World Bank and International Finance Corporation, has been in discussion with both the HRH Prince Charles, Prince of Wales-backed P8 and P80 pension fund groups. It is expected that P8 members would be investors in the fund-of-funds and that the P80 group of Asian domestic pension funds could invest alongside the fund-of-fundsmanagers at the project end. It is not yet clear what the target size for the fund will be.
DIFID and the ADB are still consulting on the final shape of the investment project, but it is known that asset managers have already started putting in tenders for the contract. The P8 group actually comprises ten pension funds collectively managing $3 trillion in assets: three from Europe, three from Asia, three from the US and one from Australia. It includes the Universities Superannuation Scheme in the UK, ABP, the giant pension plan for Dutch civil servants, as well as CalPERS and CalSTRS, the two largest US pension funds. CP3 was one of a number of initiatives set up under the Green Climate Fund initiative kick-started at the COP15 UN climate conference in Copenhagen and developed in Cancún. It aims to provide private equity for low carbon and resource-efficient infrastructure in developing countries through private-sector fund managers selected on the basis of their track record and expertise. The Green Climate Fund, which is overseen by the United Nations Framework Convention on Climate Change (UNFCCC) with a board with equal representation from developed and developing countries, will be one of several key delivery channels for the $100bn commitment at Cancún.