95% of UK pension funds and insurers in a survey said they expect to increase allocations to renewable energy assets over the next five years.
According to the survey commissioned by AlphaReal, a specialist manager of secure income real assets, 35% of respondents said they will increase allocations by up to 10%. About 44% said they will raise allocations by between 10% and 20%, while 16% will boost by more than 20%.
The remainder of respondents said there will be no change (3%) or a decrease (2%) in allocations to renewable energy over the next five years.
One-third of respondents predicted “significant increases” in opportunities in the renewable sector; 63% said there would be “slight increases” and 4% said that opportunities to invest “will stay the same as they are today”.
42% consider the current levels of pricing and valuations for UK renewable assets valuations to be “very attractive”; 49% said they are “quite attractive”; 9% said they are “reasonable”.
The crucial role of carbon capture and renewable energy in Europe’s transition to net zero
Ed Palmer, CIO and head of sustainability at AlphaReal, commented: “Renewable energy is an important component in any sustainable investment strategy, offering long-term return potential while aligning with ESG objectives and playing a crucial role in the green transition. A greater range of investment opportunities in this sector will ensure pension funds and insurers can allocate to renewable
energy both now and in the future.”
Boris Mikhailov, head of client solutions at AlphaReal said: “Investors are looking at a wider range of investment opportunities. For example, battery storage is getting more traction in
the UK as it could be a powerful return enhancer and diversifier of portfolios when combined with well-established and tested technologies such as onshore wind and solar.”
