IFM seeks $3bn for global net zero infra fund

The firm hopes the energy transition vehicle will reach a final close in the next 12-18 months with a first deal due this year.

IFM Investors has launched a new net-zero infrastructure fund, with the aim of raising $3 billion.

According to a source close to IFM, the firm’s new strategy will take the form of an open-end global infrastructure fund, and hopes to reach its target size over the next 12 to 18 months. The vehicle is also looking to transact before the end of 2022, the source told Infrastructure Investor.

In a statement, IFM’s global head of infrastructure Kyle Mangini said the platform would aim to meet the high investor demand for assets that will help the transition to a net-zero economy.

“To achieve net zero, the entire ecosystem needs to undergo a transition that will require unprecedented levels of new investment in infrastructure,” Mangini said.

“[The new strategy] is going to be focused on, essentially, zero carbon [assets] across four categories – renewable power, electrification, low-carbon fuel and, to an extent, carbon capture and efficiency.”

News of the fund’s launch coincided with the release of the firm’s new infrastructure report, which highlighted the decarbonisation of existing portfolios and alternative energy sources as key areas shaping the infrastructure sector and creating investment opportunities.

“While the longer-term impacts of geopolitical instability remain uncertain, it’s expected that decarbonisation will continue to accelerate, with the energy transition driving greater investment in emission reduction programmes,” the firm said in a statement about the report.

The new net-zero fund follows IFM’s recent partnership with QIC to purchase renewable energy for their Australian infrastructure assets through power purchase agreements worth A$500 million ($374 million; €343 million).

Aiming to reduce electricity costs and greenhouse gas emissions across Australian critical infrastructure assets, the scheme is expected to facilitate the supply of more than 400GWh of renewable energy per year by 2025. The first stage of the programme will cover key assets owned by IFM and QIC, including Melbourne Airport and Ausgrid.

Last year, IFM led a consortium that successfully bid to take over Sydney Airport for A$23.6 billion. The consortium was also comprised of AustralianSuper, QSuper and Global Infrastructure Partners.

In 2020, the firm committed to net-zero emissions across its assets by 2050, as well as becoming a net-zero emissions organisation itself, in alignment with the goals of the Paris Agreement.

It previously set public emissions reduction targets for all the assets held in its Australian Infrastructure Fund, with targets ranging from a reduction of 8-25 percent by 2024 to 17-100 percent by 2030.