Octopus Renewables joins hands with UK pension scheme for £185m splash

The third instalment of the manager's Renewable Energy Income Partnership series sees it pair up with the National Grid UK Pension Scheme.

Octopus Renewables is set to invest £185 million ($242 million; €218 million) in UK assets following a partnership with the National Grid UK Pension Scheme.

The UK-headquartered manager has launched the single account as the third instalment of its Renewable Energy Income Partnership series. REIP III is a 25-year fund targeting solar and onshore wind sites in the UK, with Octopus Renewables having discretionary management of the fund.

Octopus Renewables declined to comment on how many assets it is planning to invest in via the partnership, nor the targeted returns expected from REIP III.

REIP II saw Octopus Renewables pair up with Korea Investment & Securities in September 2018, with the Korean institution investing £107 million. Octopus Renewables’ preference for single account models rather than commingled funds is partly a response to a changing investment environment, according to Alex Brierley, the firm’s co-head.

“We recognise that each institutional investor has its own investment objectives and finding matching assets in the current environment of low interest rates and increased political and economic uncertainty can be difficult,” he told Infrastructure Investor. “Our vast renewables portfolio puts us in a privileged position to create a bespoke group of assets to meet each institutional investor’s needs.”

In November, Octopus Renewables launch a fund listed on the London Stock Exchange targeting wind and solar assets in the UK, Europe and Australia. Its initial £250 million target was surpassed, with the IPO garnering £350 million.

The group’s total renewables portfolio has a capacity of over 2.5GW, which it says makes it the largest commercial solar investor in Europe.