RI Europe 2013: APG actively pursuing renewable infra; PIMCO on ESG

Major investor eyes hydro power and industrial renewables

APG, the €325bn Dutch pension investment giant, has told the RI Europe 2013 conference in London that it is “very actively pursuing” renewable infrastructure projects such as hydroelectric power.
The fund currently backs around 60 renewable energy projects, as part of a €5.5bn infrastructure allocation.
All alternative investment deals must have a mandatory sign off from the fund’s Governance and Sustainability team headed by Claudia Kruse.
“That can help to drive change in the industry,” she told delegates. She added that APG has in the past decided against investing in certain projects – which in the event turned out to be a good decision given that they turned out to be controversial.
Kruse also revealed that APG, a leading name in responsible investment, is also very interested in some of the larger industrial renewables portfolios that are starting to come on the market.
But a stable policy framework was key, she said, giving the example of a proposed Norwegian gas pipeline project which it rejected after the government shifted returns expectations.

Speaking on the same panel, Helene Winch, Head of Policy at the largest UK pension fund, the BT PensionScheme, explained some of the reasons why UK funds have largely not invested in infrastructure. She pointed out that, while the UK market is perhaps the most established in the world, it is not designed to offer what pension schemes need. Private equity-type funds “buy it, hold it, flip it” while the BTPS wanted to hold assets over a much longer timeframe. BTPS, though, does have a stake in water utility Thames Water and fellow pension fund USS is involved in a bid for Severn Water.
Elsewhere at the event, in response to a question from the floor from Jane Goodland at investment consultants Towers Watson, a senior figure from fixed income giant PIMCO acknowledged it could and should do more in terms of reporting on its ESG processes.
Senior Vice President Charles Watford said: “Demonstrating ESG in a credit report is something we are looking at. We have, however, already rolled out several things that have made ESG easier to see,” he said.
“It would be great if there were one ESG standard on every credit report, and we could just send it out. But we’re not there yet, partly because the requests we get are so diverse.”