Greater Manchester fund commits to renewable power developer as part of new impact portfolio

The £13.3bn (€18.8bn) Greater Manchester Pension Fund (GMPF) has committed £10m to UK renewable energy developer Albion Community Power as part of its new ‘Impact Portfolio’ programme which will see the fund allocate 1% of its total portfolio to investments with a commercial return and a positive societal impact.

The Impact Portfolio is a follow-on from GMPF’s involvement in the Investing4Growth initiative, a £152m commitment by a coalition of institutional investors to impact investment.

A spokesman for GMPF said now the money had been allocated the fund has started the Impact Portfolio and is seeking to collaborate with other local authority pensions schemes on it.

One of its first commitments to the Impact Portfolio is £10m to Albion. It joins the UK Green Investment Bank (GIB) and Glasgow’s Strathclyde Pension Fund as investors in the Albion community fund.

GIB and Strathclyde committed £50m and £10m respectively to Albion earlier this year.

Albion has now raised £70m of a targeted £100m to fund community-scale renewable energy projects.It has started building a £3.3m hydropower plant in the Scottish Highlands that will generate enough electricity to supply about 550 homes.

Albion’s chair is former Group CEO of RWE Npower Volkers Beckers and its chief executive Patrick Reeve is managing director of Albion Ventures, which owns Albion Community Power. Reeve founded the venture capital division of Close Brothers Group in 1996 before leading its buy-out to form Albion Ventures. Former Conservative Environment minister Timothy Yeo resigned as chairman in 2013.

Kieran Quinn, chair of Greater Manchester Pension Fund – and chair of the Local Authority Pension Fund Forum – said: “We look forward to supporting the continued expansion of community-scale renewable energy schemes across the UK. ACP will play a key role in this regard as the pressure to diversify beyond.”

Strathclyde Chairman Paul Rooney added there was “clearly a strong and growing appetite” among forward-thinking pension funds to diversify their portfolios into this sector.

The Greater Manchester Pension Fund recently backed TIAA–CREF Asset Management’s new $667m (€943m) timber investment firm Global Timber Resources LLC.