Fund management house Gravis is launching a clean energy income fund which aims to provide 4.5 per cent return
According to the company the fund will invest in well-established companies which own and operate clean energy assets based in developed countries.
William Macleod, director of Gravis, said: "There is a lot of renewable energy investment going on in China but if one of our key requirements for the fund is the preservation of capital, we felt China was a little too edgy for us."
Gravis was established in 2008 as a specialist investor in infrastructure and now managers around £2.5bn of assets in the sector in the UK.
It has invested around £500m in clean and renewable energy projects since 2011.
Mr Macleod added that Gravis was unperturbed by the actions of the Trump administration in the US, which has withdrawn its country from the Paris climate accord, despite the fact the country would represent the fund's largest exposure.
He said: "We ignore them frankly. We didn't think they were of any significant relevance to the listed company sector."
The initial portfolio is expected to consist of around 31 securites listed in the US, UK, Canada, Europe and New Zealand, with most of that invested in companies that own operational renewable energy assets, mainly wind, solar and hydro projects.
Mr Macleod said the fund would be marketed on its ability to secure returns, rather than simply on its environmental credentials.
He said: "In the course of running our UK fund and doing our homework on a global fund, we became aware that the clean energy sector was massively overlooked.
"By 2030 there will be more renewable energy generated than there will be by coal.
"When we are all jumping in our electric cars there is not enough power. We need to install a lot of these clean energy assets and they are being installed at the most tremendous rate.
The ongoing charges figure will be capped at 0.8 per cent, taken from income.
Gravis already runs a UK infrastructure fund and launched the first UK student accommodation REIT in 2013.
According to its website, Gravis generally involves itself in long-term projects, investing in assets that will be needed by the UK for many years to come, such as hospitals, schools, student accommodation, energy generation and other assets of the UK's social and community infrastructure.
It stated that its infrastructure investments are generally underpinned by obligations of UK central and local government. It's student accommodation investments generate non-correlated counter-cyclical income and are supported by the stable long term demand for UK higher education facilities.
Duncan Glassey, a partner at Edinburgh advice firm Wealthflow, said: "We certainly apply a sustainability overlay which means that there is a weighting towards companies that are doing the right thing.
"Would we pick a certain fund to give us exposure? We probably wouldn't because it is not our approach. We have got quite a systematic, diversified approach. We are big on diversification which means taking bets on smaller niche funds doesn't match our philosophy."
damian.fantato@ft.com
