Prime Super beefs up renewables portfolio with two wind farms

Prime Super’s acquisition of two wind farms in Victoria ties in with its strategy of opting for niche deals with strong returns, said CEO Lachlan Baird.

Melbourne-based pension fund Prime Super has bought two wind farms in Victoria for approximately A$80 million ($54 million; €51 million) as it looks to grow its portfolio of renewable energy assets.

The superannuation fund snapped up full ownership of the Ferguson and Diapur wind farms in Victoria. The wind farms have a generating capacity of 12 MW and 8 MW respectively, adding to the fund’s existing 100 percent ownership of Mortons Lane Wind Farm (19.5 MW) in Victoria, which it acquired in 2021. The deal was made in conjunction with investment manager Patrizia.

Prime Super chief executive Lachlan Baird told Infrastructure Investor that the deal ties into the superannuation fund’s broader infrastructure investment strategy.

“It’s finding these opportunities both domestically and internationally for good long-term investments that have a good backing from a return point of view so we can actually understand the future cash flow that comes out of it and therefore the long-term internal rate of return that we’re going to get from these investments,” Baird said.

“This deal [also ties into] the current climate of renewable energy creating new opportunities, and [complements] our investment in the wind farm in Mortons Lane, Victoria,” Baird added.

Beyond wind farms, Prime Super’s renewable energy investments include commitments to Norwegian waste-to-power generator SAREN Energy and debt investments in solar facilities. To date, it has largely focused on renewables assets in Australia and Europe, and intends to continue focusing on those markets while also exploring opportunities in the US.

“Most of [our debt investments in solar assets] have matured now, so we are looking for good opportunities in that sector. For us, [investment in the renewables space is about] understanding, not just the asset itself, but the sector and the income that will be generated out of it. That’s the core to how we make these investments [and] for most of these [types of investments], it’s important for us to have a good power price agreement that underpins this future revenue flow,” Baird said.

With A$6 billion in assets under management, Prime Super’s total allocation to alternatives is 30 percent. Currently, 15 percent of its total portfolio is allocated to a broad range of infrastructure assets including Nordic social infrastructure asset provider Kinland, which owns and operates aged care and childcare facilities.

“For us, it’s about looking for different opportunities,” Baird explained. “Because of who we are, we are different to the very big super funds so we have a different cheque size.

“We are looking at different investment opportunities, which creates a separate niche for us, and those opportunities are very different to [the opportunities sought by larger funds]. And from my point of view, we can get potentially better returns and better risk adjusted returns out of these because we’re investing in our own part of the market.”