Full Title: Reallocating Energy Investments? Consider the Clean Energy Sector
Author(s): American Council on Renewable Energy (ACORE)
Publisher(s): American Council on Renewable Energy (ACORE)
Publication Date: June 1, 2015
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Description (excerpt):
Today, Clean Energy is an established sector, continues to grow, and offers an increasingly diverse set of investment options that can address a broad spectrum of investor objectives and portfolio allocation targets.
Over the past several years, many investors have begun to shift the mix of their energy portfolios to be less carbon intensive and are capitalizing on opportunities to invest in the Clean Energy sector. This set of investors continues to grow rapidly and today includes Sovereign Wealth Funds, Public and Private Pension Funds, Insurance Companies, City Governments, Foundations, Endowments, Family Offices, and High Net Worth Individuals.
Annual investment in the Clean Energy sector has grown from $53Bn in 2004 to $339Bn in 2014.1 The sector is expected to attract an additional $5Tn+ in investment by 2030,1 without assuming any portfolio reallocations to favor Clean Energy.
Multiple investment options across asset classes are now available and more easily accessible by investors. Private investment options include but are not limited to Venture Capital, Private Equity, Real Asset (project-level) Equity, Tax Equity, and Fixed Income. Investments are typically available to Institutional and Accredited Investors. Public investment options include, but are not limited to, Corporate Stock, YieldCos, Corporate Bonds, Green Bonds, Mutual Funds and Exchange Traded Funds (ETFs). These investments are accessible by both Institutional and Non-Institutional Investors.
An increasing number of investors are seeking to rebalance their investments to optimize long-term portfolio performance, address future financial risks associated with being over-weighted to the fossil fuel sector, and capitalize on investment opportunities that offer attractive returns and are aligned with the trend towards a less-carbon intensive economy. Since 2012, Clean Energy indices have performed favorably relative to S&P 500, NASDAQ, and fossil fuel indices