First Sentier Investors has launched a private debt strategy focusing on loans in the renewable energy sector.
Supported by MUFG Bank, which had experience in project finance and debt capital markets for sustainability-linked financing, the initiative was part of a broad strategy by First Sentier around environmental, social and governance (ESG).
The strategy would be led by head of fixed income, short-term investments and global credit, Tony Togher, and the firm said there was already a “strong pipeline of opportunities”. It meant First Sentier would be able to offer investors a diversified portfolio of ESG/sustainability-linked loan assets beyond the traditional bank market.
“With the renewable energy sector in Australia growing rapidly, we are pleased to provide our clients with a debt-based investment product that taps into the transition from a fossil fuel-driven economy to a low-carbon economy,” Togher said.
MUFG had publicly committed to investing $238 billion into sustainability-related financing globally by 2030.
Siong Ooi, MUFG Bank’s co-head of debt capital markets, said, “The successful launch of this initiative represents another exciting step forward for MUFG’s sustainability financing vision by delivering on two key strategic priorities; those being an absolute commitment to ESG/sustainability-linked financing, as well as creating new channels for the distribution of loan assets.
“We anticipate that there will be strong investor demand for this type of asset. MUFG Bank will seek to originate and structure future investment opportunities for First Sentier Investors to meet this demand.”