Aus & NZ: HRL Morrison achieves first close on green infra fund

26 July 2018 - 12:00 am UTC

HRL Morrison has reached first close on fundraising for a new AUD 1bn (USD 742.1m) Growth Infrastructure Fund with an AUD 150m investment from Australia’s green bank.

It is understood several other Australian investors have also committed money to the fund, which will seek to cut the emissions of the assets it buys. The amount raised to date has been disclosed but is understood to be above AUD 250m. 

The Clean Energy Finance Corporation (CEFC) announced its investment on Thursday (26 July). 

The fund will acquire and develop a range of “essential assets”, including hospitals, data centres, retirement and aged care accommodation, student housing and renewable energy. Science-based targets will be adopted “over time” to make sure the portfolio has zero emissions.

While initially Australian investors have committed to the fund, it is understood there will be a mix of Australian and offshore investors in the fund with strong interest from overseas.

The fund will likely only invest in Australian assets, with about 20% allocated to renewable energy.

“Morrison & Co has been investing in renewable energy for over 20 years and we are convinced that applying the decarbonisation and energy efficiency lens to a broader set of infrastructure assets will generate better long-term investment outcomes,” said Morrison & Co chief investment officer, Paul Newfield in a statement.

Newfield told Inframation that as for many of Morrison’s investments to date, the fund will target complex assets with exposure to particular long-term trends, not just GDP growth. 

But he said the fund’s objective marks a different approach to traditional renewable energy funds set up by infrastructure investors.

“What’s different here is we’re looking at carbon-related risks and opportunities across all assets that can [also] be return enhancing,” he said.

“Our general view is that there is mispricing of carbon risks. I expect that five years from now many more infrastructure funds will be doing something similar.”

CEO of the CEFC, Ian Learmonth, said the investment is about “showing how we can readily improve the way we build and operate our essential economic and social infrastructure”.

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