Schroders, one of Britain’s biggest fund managers, is taking another big step into environmentally-friendly investments by buying control of a major renewable energy investment group for about £360m.
Sky News has learnt that Schroders is in advanced talks to buy a 75% stake in Greencoat Capital, which ranks among the largest UK-based managers of renewable energy investments.
Sources said a deal could be announced within a matter of days, adding to the roughly £717bn in assets that Schroders already manages.
A transaction will significantly expand Schroders’ private assets business and its presence in the increasingly crucial area of environmental, social and governance (ESG) investing which is driving much of the corporate activity across the asset management industry.
The deal will include an option for it to buy the remainder of Greencoat Capital, according to one insider.
Greencoat Capital, which has about £6bn under management, runs funds including London-listed Greencoat UK Wind and Greencoat Renewables.
It also manages funds specialising in solar assets and bioenergy and heat.
The company was put up for sale earlier this year when it hired Fenchurch Advisory Partners to sound out prospective buyers.
Founded in 2009 by Richard Nourse, one of the City’s most prolific energy sector bankers, Greencoat is one of a growing number of specialist renewables asset managers.
In 2019, Schroders acquired full control of BlueOrchard, an impact investment manager focused on emerging and frontier markets.
City sources said the underbidders for Greencoat Capital had included a number of other large fund managers.
Buying Greencoat will increase Schroders’ exposure to long-term assets which provide a steady yield in terms of investment returns.
Managing the transition to a low-carbon economy has become the biggest theme in global investing, with a particular focus on the investment management industry’s approach to the issue during the recent COP26 summit in Glasgow.
Schroders declined to comment on Wednesday, while Greencoat Capital could not be reached for comment.