Can you give a brief overview of your strategy in terms of what you are trying to achieve for investors, your investment process and the make-up of the investment team?
At ThomasLloyd we are impact investors. We define impact as investing new money, into real assets in high growth and emerging markets with the aim to create positive and measurable outcomes on the environment and society. We have a broad range of investment solutions that cover the entire project lifecycle, from early-stage development through construction and into commercial operation of power plants. We work across the entire capital mix in both private equity and private debt and have a range of funds and liquidity profiles depending on investor demand. One example is our Luxembourg based AIF, the Sustainable Infrastructure Income Fund which recently passed €100m AUM and aims to provide a 6% running yield, paid quarterly, as part of a total return profile that has delivered over 11% per annum since launch. Also, 100% of ThomasLloyd funds are aligned to Article 9 of the EU Sustainable Finance Disclosure Regulation (SFDR).
In addition to the fund space, we have been active as an issuer of infrastructure bonds since 2006. For us, it is essential that we provide finance directly at an asset level, without working with intermediaries. A good example of this is in the Philippines, where ThomasLloyd led the financing, construction and development of the country's first utility scale solar plant and participated in the first IFC financing of a renewable transaction in the Philippines. So that is ThomasLloyd's sweet spot with a presence in the fund space as well as in the green and infrastructure bond space.
How are you positioning your portfolio to prepare for the global recovery from the Covid-19 pandemic?
Throughout 2020, and against the backdrop of the global pandemic, there has been an increasing focus from both institutional and retail investors alike on how, and where, their money is invested. COVID-19 exacerbated the inequalities that were already present in our communities. We have seen this in the finance industry with investors demanding transparency in investments, which can clearly demonstrate environmental, social and good governance credentials. We believe this is part of a broader social change resulting in companies needing to maintain a social license to operate. This has been at the heart of ThomasLloyd's investment strategy not only today, but for the past ten years, in which we have been investing in sustainable infrastructure. Every Pound, Dollar and Euro we have invested has gone directly into building real assets in high-growth markets in Asia. Our ‘Triple Return' targets a financial return on our investment, it also aims to have a positive impact on the environment and on the society where our assets are operated. Every year we measure and asses the environmental impact of assets e.g. how they have saved CO2 emissions and on the social impact - through the creation of direct and indirect job and providing millions of people access to stable and reliable energy, that they wouldn't have had.
The pandemic has sharpened the understanding that climate change, like the COVID-19 pandemic, could upend the financial system. Energy transition is a huge opportunity for public and private market investors and financiers. Governments will need to reboot their economies. Infrastructure investment will be encouraged through fiscal stimulus and regulatory incentives. This, combined with historic low interest rates, is driving investor demand for income-generating real assets. Now more than ever the financial sector has a critical role to facilitate a transition to a low-carbon economy.
Can you identify a couple of key investment opportunities for your fund you are playing at the moment in the portfolio? This could be at a stock, sector or thematic level.
At ThomasLloyd we only invest in high growth and emerging markets and have investments in real assets in India and the Philippines. By capitalising on the growing need for private sector infrastructure funding, this asset class offers investors the opportunity to tap into high-growth markets and benefit from long-term predictable income with capital appreciation. It can also provide diversification from other asset classes and some inflation protection. We have over a decade of successful investments in sustainable infrastructure across the funding, construction, development an ongoing operation of the assets and provide rare access to highly-sought after assets with high barriers to entry that are powering growth in emerging markets.
Asia is the world's largest and fastest growing consumer of energy as well as the largest emitter of CO2. This a result of its rapid economic development, dominant manufacturing base and dependency on coal as the primary source of energy. In this context, the decarbonisation poses an unprecedented challenge.
China, Japan and South Korean have recently pledged net zero targets by the middle of this century which signals a transformation changes in the Asian energy sector and potentially acting as they key catalyst for decarbonisation efforts in other Asian countries. The scale of this opportunity makes it the defining investment trend of this century for investors. As an early pioneer and investment innovator, our offering present investors with a compelling and exciting investment opportunity.
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