- The largest market opportunity in the space
- Asia’s fast-growing population and economic growth driving demand for energy
- Robust governmental support via regulatory regimes and policies
- Need to diversify energy sources away from fossil fuels
Energy Transition Infrastructure
Investing in the world of tomorrow
What’s new
As the world transitions towards a low-carbon economy, the HSBC AM Energy Transition Infrastructure (ETI) strategy taps into the opportunities arising from the global demand for energy transition investments. The ETI strategy has an illustrated gross IRR of 15-20 per cent1, and assists in the transition to a more sustainable economy.
1. Any forecast, projection or target when provided is indicative only and is not guaranteed in any way. Illustrated using model and assumption and may not reflect actual fund’s performance
The Asian Opportunity
Estimated Energy Supply Investment to reach Net Zero, select regions (2020-50)
The opportunity - at a glance
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Australia, Hong Kong, Japan, Korea, New Zealand, Singapore, Taiwan
- Investment grade markets with net-zero ambitions
- Deep and liquid capital markets with increasing focus on sustainable energy investments
- Nascent sector with markets lag mature European counterparts in renewables capacity as % of total energy mix, greater scope for growth
- USD275bn investment in next 5 years in North Asia markets alone
South and Southeast Asia
- Fast growing regional markets including India, Indonesia, Malaysia, Philippines, Thailand and Vietnam
- Government targets for renewable energy generation
- Opportunistically looking at other OECD markets with nexus or expansion plans to Asia
Source: BloombergNEF NEO 2022; 2. APAC Data set excludes Mainland China, Tsinghua estimates for China 2021, IGCC estimates for Australia 2021, AIGCC estimates for other countries 2021
The Mid Market Opportunity
We believe that the mid-market can provide a greater breadth of deals at more compelling valuations
The Pillars of the Strategy
Opportunities in renewable regeneration, grids, energy storage, charging and meter infrastructure in developed Asia
A Regional Answer to a Global Issue
We believe Asia represents a significant opportunity for renewable energy investment
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Paul Rhodes |
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Rowan te Kloot |
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Ana Carolina Romero |
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Andrew Wang 王浩晖 |
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Takayasu Hori 堀 隆泰 |
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Chris Yamane 山根 クリス |
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Clare Morton |
Our Latest Investment
The HSBC Asset Management ETI team has acquired a solar PV business focused on developing and operating energy transition projects across north Asia.
We expect the experienced management team to capture the sector opportunity in mature markets that are transitioning, with a robust pipeline of corporate Purchasing Power Agreement off-takers.
Key Risks
Risk Considerations: There is no assurance that a portfolio will achieve its investment objective or will work under all market conditions. The value of investments may go down as well as up and you may not get back the amount originally invested. Portfolios may be subject to certain additional risks, which should be considered carefully along with their investment objectives and fees.
Illiquidity: An investment in alternatives is a long-term illiquid investment. By their nature, alternatives' investments will not generally be exchange traded. These investments will be illiquid.
Long term horizon: Investors should expect to be locked-in for the full term of the investment.
Economic conditions: The economic cycle and prevailing interest rates will impact the attractiveness of the underlying investments. Economic activity and sentiment also impacts the performance of underlying companies and will have a direct bearing on the ability of companies to keep up with interest and principal repayments.
Valuation: These investments may have no or a limited liquid market, and other investments including those in respect of loans and securities of private companies, may be based on estimates which cannot be marked to market until sale. The valuation of the underlying investments is therefore inherently opaque.
Market risk: There is no guarantee in respect of the repayment of principal or the value of investments, and the income derived therefrom may fall as well as rise. Investors therefore may not recoup the original amount invested in the Partnership. In particular, the value of investments may be affected by political and economic news, government policy, changes in technology and business practices, changes in demographics, cultures and populations, natural or human-caused disasters, pandemics, weather and climate patterns, scientific or investigative discoveries, costs and availability of energy, commodities and natural resources. The effects of market risk can be immediate or gradual, short-term or long-term, narrow or broad.
Political and economic risks: General economic conditions may affect the activities. Changes in economic conditions, including, for example, inflation, unemployment, competition, technological developments, political events and other factors, none of which will be within the control of the General Partner or the service providers, can substantially and adversely affect the business and prospect investors. Due to the geographic scope of its activities, the strategy may be vulnerable to country or regional-specific political, macroeconomic and financial environments or circumstances.
Further information on the potential risks can be found in the LPA.