The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Gases from crude oil production have customarily been flared, adding huge amounts of greenhouse gases to the atmosphere annually.
MTM Capital Partners, a subsidiary of Man, will be the investment manager of the fund. The Abu Dhabi government-owned International Petroleum Investment Company (IPIC) has committed to invest an initial $300 million as a cornerstone investor and will play a major role in the development of the fund. Fluor Cooperation, one of the worldÆs largest engineering, procurement and construction firms and a Fortune 150 company, will be the fundÆs technical partner.
This initiative launched by IPIC and Man is expected to benefit the environment by reducing damaging gases from oil production while providing new energy. The fund is the first of its kind to team a global financial institution with a government that is a major player in the energy sector.
Man CEO Peter Clarke says he expects investors to support the fund raising for the AGEF, both because investors are increasingly seeking environment-friendly investments and MTM has a reputation in this area.
ôMTM is a leader in environmental investments in emerging markets and there is a keen appetite for investments that help protect the environment while aiming for very attractive returns,ö Clarke says.
Burning off û or flaring gas û adds 350 million tonnes of carbon dioxide to the atmosphere annually. The World Bank Global Gas Flaring Reduction Initiative estimates that, in 2006, oil and gas installations flared and vented 150 billion cubic metres of natural gas. This is equivalent to 25% of the annual gas consumption of the US or 30% of the European Union.
The Abu Dhabi Government has played a major role globally in pioneering environmental projects and has been working on a zero-flaring target as a strategic objective.
IPIC is an investment company wholly owned by the Abu Dhabi government with a mandate to invest in the hydrocarbon sector outside Abu Dhabi. IPIC has successfully invested in and developed long-term strategic partnerships with energy companies in both the private and public sectors for over 20 years. The strategic investment partnership between IPIC and MTM furthers this strategy and is expected to position IPIC in a lead role in the converging energy, resources, infrastructure and environmental sectors globally.
ôRecognising the convergence of energy, resources, and the environment has been a long-standing challenge for many countries worldwide,ö says IPIC managing director Khadem Al Qubaisi. ôWe believe the strategy developed by MTM solves this issue and serves as an enabler that can produce significant benefits to host countries.ö
Rikky Hasan, managing director of MTM, who led the team that structured and negotiated the transaction, says the fund is a first in the sense that it is not only expected to generate returns on investment while benefiting the environment, but will also contribute to the growing need for energy.
Mega players Nippon Life and Dai-ichi Life are looking for opportunities in higher-yield single-A US corporate bonds, which offer more appealing yields than stagnant domestic offerings.
The “lower for longer” monetary policy and stimulus packages, coupled with the rolling out of vaccine programmes favorably support real estate investing in the region, with offices and data centres presenting forward-looking opportunities.
As US fixed income default rates rose and yields fell during the pandemic, are Asian bonds, which have had more stable yields through 2020, looking more attractive?
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