Octopus bids to diversify base with £250m fund listing

Octopus Renewables is looking to diversify beyond its traditional institutional investor base with the launch of a £250 million ($333.6 million; €301.7 million) fund listed on the London Stock Exchange.

The Octopus Renewables Infrastructure Trust will target onshore wind and solar assets in the UK, Continental Europe and Australia, it said in a statement.

The fund is flexible on whether assets are greenfield or brownfield and is examining a pipeline worth £2.8 billion, with a targeted return of between 7 and 8 percent. A spokeswoman for the group told Infrastructure Investor it believes it can invest the £250 million within six months.

Octopus Renewables has previously pursued assets in these geographies through private funds and separate accounts and owns a global portfolio with 2.3GW of capacity. However, it believes the time is right to go beyond this strategy.

“The focus has always been on institutional investors. We have now decided to launch a listed product in order to diversify our investor base,” the spokeswoman said. “We believe this is the opportune time to list the fund, given the focus on climate change and renewable energy and investor appetite in this area”

The move to include Australia in what is otherwise a European strategy comes after Octopus last year established an office in the country and earlier this year made its first investment there, acquiring the country’s largest solar plant.

“Geographic diversification is key to our differentiated strategy, and enables us to spread our risk across different factors that may impact them, therefore limiting our exposure to a single energy price driver,” the spokeswoman added.

Several clean energy-related funds that have launched on the London Stock Exchange have fallen short of their targets. Most recently, in May, Aquila Capital’s European Renewables Income Fund raised €154 million, despite targeting €300 million.