Schroders has agreed to acquire a 75% stake in specialist investment manager Greencoat Capital to grow its sustainable investment offering.
The British asset manager will pay £358m ($473.17m) in cash for the purchase, which is expected to bolster its sustainable investment offering.
Founded in 2009, Greencoat specialises in renewable energy infrastructure investing, including wind, solar, bioenergy and heat.
It operates around 200 power generation assets across the UK, Europe, and the US, with an aggregate net generation capacity of more than 3 gigawatts.
As of the 30 November 2021, the firm had £6.7bn assets under management (AUM).
The deal is in line with Schroders’ strategy to establish an extensive private assets platform and push forward its sustainability efforts.
Furthermore, it will enable the company to cater to the growing demand for environmentally positive products among its institutional clients.
The US and European market for renewable energy assets is estimated to increase by over $1trn to 2030.
Schroders noted that it is positioned to tap into this opportunity with its focus on investment and asset management into all renewable energy types.
Under the agreement, Schroders has an option to acquire the remaining 25% shareholding in the future at a price based on a fair market valuation.
Greencoat will become part of Schroders’ private markets division and will be renamed to Schroders Greencoat.
It will continue to be led by existing management team, consisting of its founders Bertrand Gautier, Laurence Fumagalli, Stephen Lilley and Richard Nourse.
It is expected to benefit from Schroders’ distribution reach, sustainability capabilities, management experience and brand.
Schroder Group CEO Peter Harrison said: “We have demonstrated our ability to integrate acquisitions successfully, to generate growth and create significant value for our shareholders. We are confident that we will be able to leverage the strengths of both firms while preserving Greencoat’s differentiated position in the market.”
Nourse added: “Combining this team with Schroders’ global distribution network and expertise will enable clients to capitalise on the unequalled opportunity that our sector represents – a trillion dollar investable universe – and the chance to meaningfully support the global transition to net zero.”