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Investing in the Energy Transition

The Opportunity for Institutional Capital

Across private equity, special asset funds, and infrastructure investors there is immense dry powder waiting to be deployed. The global private equity industry alone has a record level of cash reserves, with an estimated US$2 trillion available for buyouts and other investments. Finding opportunities that are of a large enough investment size, whilst being consistent with investment mandates and fund decarbonisation commitments, has been proving a challenge.

The influx of buyers seeking to acquire traditional renewable assets such as wind and solar, has fuelled fierce auctions and led to price escalation. However, the convergence of development and operational risks, along with competitive pricing, has cast a new light on these 'green' investments, challenging their appeal to private investors.

With the energy transition unfolding and the investible landscape rapidly evolving, one question remains: how can private capital be deployed to support the low-carbon transition, whilst being of sufficient investment size and meeting the risk appetites and ESG objectives of investment funds?

Our latest report dives into the intricate web of considerations and challenges confronting private equity, special asset, and infrastructure investors in the energy transition era. It reimagines the 'green' vs 'brown' investment discourse, by spotlighting transformation-focused ‘olive’ investments and underscores the potential for private investors to steer the energy transition.

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