Pension funds and insurers back new UBS Swiss clean energy fund

Fund starts with €201m, bulk of which comes from an insurer

Swiss banking giant UBS has partnered with a local asset manager and an insurer to launch a new closed fund that invests in renewable energy projects and companies around Switzerland.

UBS’ partners are Fontavis, an asset manager based in Baar that is the fund’s advisor, and Die Mobiliar, an insurer that has several roles. Beyond contributing the bulk of the seed money to the fund, Die Mobiliar is providing Fontavis risk assessments on target companies and is offering insurance cover to those firms. UBS will distribute the fund, called “UBS Clean Energy Infrastructure Switzerland.”

The fund starts with CHF250m (€201m) in seed money from Die Mobiliar and 17 other insurers and pension funds. UBS said a second round of fund-raising would be held this year.

The fund invests in projects and non-listed firms involved with biomass, hydropower, solar thermal energy,photovoltaic and those dealing with energy efficiency and supply infrastructure. “The potential for solid returns and stable cash flows with manageable risks is attractive,” said Beat Götz, head of the institutional business at UBS Global Asset Management Switzerland.

“The potential for solid returns and stable cash flows is attractive”

Another factor in launching the fund, according to Götz, was the desire among Swiss pension funds to “make investments, which apart from generating yield, will also demonstrate their responsibility as investors in and for Switzerland.”

The fund, which is only being sold to Swiss investors, aims to double its assets to CHF500m by December 2014.