Scaling climate solutions: inside LPPI’s new Environmental Opportunities Fund

The £26.4 billion LPPI pool is no stranger to investing in climate solutions. As a member of the infrastructure platform GLIL, it already holds exposure to renewable energy assets. However, the launch of the environmental opportunities fund represents a significant step forward, Threlfall argues.  Unlike previous allocations to renewables, which were part of broader infrastructure mandates, it is explicitly focused on tackling climate change. Its three key objectives are climate mitigation, adaptation and the protection and restoration of nature.

The open-ended vehicle has secured initial backing from LPFA and Lancashire County Pension Fund.

Speaking from LPPI’s busy London office in Finsbury Avenue, Threlfall sets out the parameters for the fund: “Each investment will have some form of environmental alignment between the three objectives,” she says.

From mango farms to multi-strategy mandates

Threlfall brings over a decade of experience from her previous role as investment director at a family office, where she worked across private equity, real assets and natural capital. Her portfolio included the acquisition of farmland assets, including a mango farm in Australia's Northern Territory.

Having joined LPPI in summer 2024, she has since been at the centre of designing the new open-ended, multi-strategy private markets vehicle. The fund has a broad remit to invest across infrastructure, private equity, private credit, venture capital and natural capital.

While Threlfall and one analyst act as the core team behind the fund, they work in close collaboration with colleagues across LPPI’s wider private markets team, feeding into asset allocation and due diligence processes.

“Our current expectation would be a relatively equal split between private equity, incorporating venture capital, and infrastructure, with a smaller allocation to natural capital,” she explains.

Investment approach and asset mix

The remit has been kept deliberately broad to reflect the evolving nature of climate-related investments.“We are interested in investments that make companies more efficient in terms of energy and other inputs, and also in reducing waste. That provides better outcomes for both company profitability and the environment,” Threlfall explains.

Despite an increasingly uncertain geopolitical backdrop and the world's largest energy firms rowing back on their investments in renewables, she remains optimistic about the direction of the energy transition. “Many of the technologies for decarbonisation already exist. They just need scaling,” she says.
“The climate challenge is not going to change based on who is in the White House.”

That said, Threlfall is careful not to overpromise on performance. Returns will vary depending on the eventual portfolio mix. “Venture capital could see higher double-digit returns, while infrastructure and natural capital investments may be in the lower double digits,” she explains.

The fund will invest through a mix of third-party managers and co-investments. Its first external manager, expected to run a separately managed account, has already been appointed.

While climate adaptation and mitigation are central to the strategy, the team is also considering thematic opportunities such as biodiversity, resource efficiency and nature-based solutions. Threlfall believes these areas not only offer environmental benefits but can also drive operational and financial improvements for portfolio companies.

“If we focus on things that make businesses better, those opportunities will also be good for the climate. They are more likely to have political support and may even align with job creation and economic development,” she suggests.

Natural capital and carbon credits under scrutiny

The team is also evaluating potential investments in carbon credits, but Threlfall is cautious about the current market environment.
“The carbon credit market is still nascent and volatile. We have reputational risk to consider,” she says.

Prices in the voluntary market have declined sharply over the past two years, amid concerns about credibility and greenwashing. Nonetheless, she acknowledges that credits may play a growing role in net zero strategies in future.

That same caution applies to natural capital investments, where she sees a risk of traditional strategies being rebranded without genuine environmental benefits. “Natural capital solutions must have the appropriate climate angle rather than just general forestry or agriculture funding,” she stresses.
“If you're still planting the same number of trees, cutting them down, and not doing anything different, you're not getting any further towards net zero” she adds. 

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