UniSuper invests $623m in Macquarie green fund

UniSuper announced it has committed up to US$400 million (AU$623 million) to the Macquarie Green Energy and Climate Opportunities Fund (MGECO).

MGECO is an open-ended fund that invests in large scale, mature sustainable technologies to support the transition to net zero and help meet sustainable energy needs in Australia and overseas.

It aims to provide diversified exposure to the global renewable sector with a growing pipeline of opportunities across geographies, technologies, power markets, renewable resources, and asset lifecycle stages.

UniSuper chief investment officer John Pearce said the super fund is a significant investor of MGECO and will be investing alongside Macquarie's balance sheet.

"This is an investment of scale and quality with a pipeline of opportunities helping to accelerate the transition to net zero. It will enable UniSuper to invest across technologies and geographies in projects that we believe will generate attractive long term returns for our members," Pearce said.

"The energy transition will require mature sustainable technologies to meet net zero targets in Australia and around the world."

Pearce said Macquarie is one of the most experienced managers in the space with strong financial backing and a proven track record.

"The investment supports UniSuper's strategy to develop smart partnerships with high quality, aligned managers to complement our in-house investment capability," he said.

MGECO targets a portfolio that aims to be resilient across the economic cycle with an initial focus on assets in hard to access sectors and geographies that provide opportunity for growth.

The portfolio is expected to include six seed investments across Australia, Asia, US, and Europe. These businesses will provide initial access to approximately 100 underlying projects across onshore and offshore wind, solar, storage and carbon related projects.

The investments include Aula Energy, an onshore renewable energy business that plans to develop, build, and operate utility-scale wind, solar and integrated battery projects across the Australian and New Zealand markets to create a diversified portfolio of actively managed green energy generation assets for the future.

UniSuper said MGECO's structure and long-term investment horizon aligns both with the nature of the investments and with UniSuper's members many of whom would be investing their retirement savings for many years to come.

UniSuper said the move comes as it continues to work towards its objective to achieve net zero in its investment portfolio by 2050 and to contribute to Australia's goal to achieve a 43% reduction in emissions by 2030.