UK investors are ready to increase their investment in renewable energy, according to results of a survey by Downing.
In February Downing commissioned PureProfile to interview 100 professional investors (UK pension funds, institutional investors and wealth managers) who collectively manage around £118 billion in assets. Some 92% of them said they are looking to diversify their portfolios using renewable energy assets over the next 18 months.
When asked which three areas of renewable energy will be most likely to achieve successful diversification, three-quarters (76%) mentioned solar PV; 74% mentioned hydro; 64% mentioned biomass; 59% mentioned wind and 27% mentioned wave and tidal energy.
As regards the location, 76% named the UK, 80% mentioned Europe and North America, 55% named Asia and 44% said they would invest in other areas.
Henrik Dahlstrom, Investment Director at Downing Renewables & Infrastructure Trust, said: “It makes sense that investors see renewable energy as a reliable diversifier. UK pension funds recognise the value these assets have to portfolios, and we have already seen a trend to increasing allocations, which looks set to continue over the next year and a half.”
The company said that renewable energy projects have “stable, predictable, long-term cashflows and are often wholly or partly linked to inflation”. Downing itself has invested in more than 175 renewables projects across Europe in the last 12 years.