Oxford fund set to tap renewable energy shortfall in eastern Europe
Oxford Sustainable Group's new closed-end, renewable energy fund is set to take advantage of development opportunities in Finland, Romania and Estonia as demand for renewable energy grows.
The Oxford Renewable Energy fund - listed on the Channel Islands Stock Exchange - aims to raise €200m (£172m) for renewable energy projects.
The fund, which will have a fixed five-year term, aims to take advantage of the renewable energy shortfall in central and eastern Europe and has targeted net returns of 20 per cent per year.
Hadley Barrett, chief executive of Oxford Sustainable Group, said unlike Germany and the UK, central and eastern European countries had more scope for renewable energy development.
"The demand for renewable energy today vastly outstrips supply, and the demand is only going to increase, so we are confident investors are perfectly positioned to make excellent, risk-adjusted returns while contributing to social and economic future stability."
A number of countries had renewable energy commitments to honour, Mr Barrett said, adding that Romania had to make 33 per cent of its energy needs renewable by 2010.
He said the fund would offer investors a value-focused approach to investment, with the aim of outperforming falling and rising markets. The fund could reach final development value of as much as €2bn, he added.
"In the current climate, the new fund represents a unique opportunity for sophisticated investors to generate strong returns."
Demand for SRI products has remained strong during the economic crisis, with investors looking to maintain their commitment to the ethical funds.
Mr Barrett said the renewable energy fund, while fitting in with SRI principles, would also provide investors with good returns.
"People are interested in SRI funds, but we have a different view," he said. "We're not trying to create an SRI project, but something that is good and generates a good return."