Nuveen announces $1.3bn first close for energy infrastructure credit strategy
The North-American manager's private credit strategy will target a wide range of opportunities including renewables, storage and LNG
Nuveen, a subsidiary of North American pension provider TIAA, has announced first close for a private credit strategy aimed at financing energy infrastructure. The asset manager with $1.3tn in assets under management says it has raised $1.3bn in committed capital for the strategy thus far.
With a target of $2.5bn, Nuveen’s ‘energy and power infrastructure credit strategy’ will target energy infrastructure assets across a wide range of opportunities including renewable energy and energy storge. The investment universe for this strategy also includes ‘hydrocarbons, midstream and liquified natural gas’.
Private credit
Private credit investments through this strategy will involve growth capital and project finance in addition to financing acquisitions, equipment purchases and recapitalization and structured credit instruments.
“Bringing together the resiliency of infrastructure assets and the private credit playbook that utilizes covenant protection and structural flexibility has unlocked a strong level of investor demand across the globe”, says Don Dimitrievich, Nuveen’s senior managing director & portfolio manager, energy infrastructure credit.
The strategy’s risk mitigation is based on identifying investment opportunities with long-term contracts, pricing protection and collateral protection.
Investor demand
“Investors are increasingly interested in strategies that capitalize on their conviction in the growing global energy demand brought on by digitalization, electrification and reindustrialization while also seeking downside risk mitigation to guard against macro volatility, and inflationary and geopolitical risk”, adds Dimitrievich.
Investors backing the strategy include TIAA, Nuveen’s parent company, and an undisclosed ‘leading Canadian pension fund manager’. The company’s statement says over half of committed capital is from outside the US, including Japanese and Korean pension funds. The investor list also includes insurers and asset managers, though details regarding investor identity and specific exposures were not disclosed.
