Schroders Capital Semi-Liquid Energy Transition

Providing investors access to a global portfolio of energy transition infrastructure assets

Make an impact

An SFDR Article 9 infrastructure equity strategy with a defined sustainable objective to contribute to a net zero future

Diversify returns

Get exposure to unique renewables infrastructure assets that can deliver stable and inflation-linked returns

Open-ended and semi-liquid

Monthly subscriptions and quarterly redemptions (with a cap of 5% at the fund level)

Fund investment objective

The fund aims to provide a return in excess of 10% per annum (before fund fees have been deducted) over five to seven years and to support the transition to net zero (through the generation and efficient use of green and low-carbon energy and the avoidance of CO2e) by investing in a global portfolio of renewable and other energy transition-aligned infrastructure assets which the investment manager deems to be sustainable investments. The fund is actively managed.

What does the fund invest in?

Schroders Capital Semi-Liquid Energy Transition is an SFDR Article 9, impact-driven fund investing in renewables and other energy transition-aligned infrastructure. The portfolio is diversified across technologies, geographies, regulatory regimes and weather patterns.

The fund is managed by Schroders Greencoat, part of Schroders Capital and one of Europe’s largest specialist energy transition infrastructure investment managers. Schroders Greencoat has a proven global track record, based on an extensive in-house asset management team of over 60 engineers and finance professionals, strong global network of project partners for fast capital call rates and an attractive fee structure with alignment of interest.

Learn more about the fund and its potential benefits in our product overview.

Why invest in the energy transition now?

We believe there are three key steps that the energy transition must follow to decarbonise the wider economy; each requires significant investment into energy infrastructure.

  1. Decarbonisation of power generation: The share of electricity generated from renewables is expected to increase from 35% to nearer 81% by 2050 to reduce carbon emissions1
  2. Electrification of energy use: The share of electricity in final energy consumption is expected to increase from 23% to nearer 52% by 2050 with the growth of electric vehicles, heat pumps etc2
  3. Efficient management of intermittent renewable energy: Hydrogen and electrofuels expected to be significant share of final energy use in hard to abate segments like aviation, shipping and steel production

Source: Schroders Greencoat, 2024.

1BloombergNEF World Energy Outlook 2024, Net Zero Scenario.

2IRENA (2024), World Energy Transitions Outlook 2024: 1.5°C Pathway, International Renewable Energy Agency, Abu Dhabi.

CASE STUDY

Low carbon greenhouses

East Anglia, United Kingdom

In Q2 2024 the Fund invested in two large scale agricultural greenhouses projects, which use heat generated from local wastewater plants. Since 2019 Schroders Greencoat has invested £137m to construct and operate these assets - two of the world’s largest low carbon greenhouses - reducing the carbon footprint of produce by 75% compared to a conventional greenhouse. The investment offers long-term, secure income derived from 20-year inflation-linked, government backed Renewable Heat Incentive, as well as inflation-linked lease payments from growers.  

Disclaimer: For illustrative purposes only and not a recommendation to buy/sell. Source: Schroders Greencoat, as at November 2024.

  • Schroders Greencoat controlled stake

    100%

  • Transaction date

    Q2 2024

  • Sector

    Low carbon heating and agriculture

Fund update – H1 2024

Key topics: 0:06 - Introduction. 0:24 - Fund overview. 2:16 - Case study. 6:47 - Investment strategy. 9:58 - Summary.

What are semi-liquid investment products?

Open-ended structures - where investors can buy and sell at a prevailing NAV - have historically had limited applicability in private markets due to the illiquid nature of the underlying investments. In response to this, semi-liquid structures have been developed to provide liquidity in a controlled manner.

A well-constructed portfolio, one that is diverse by geography, sector, type and vintage, can engineer a level of “natural liquidity” that is regular and consistent. Semi-liquids also employ liquidity management tools that can control liquidity within the fund. The result is a platform that provides investors with a liquidity window without compromising returns and helps them meet their investment objectives.

To find out  more about Schroders Capital Wealth Solutions, please click the button below.

Meet the manager

Slide 1 of 3

Karin Kaiser

Head of Private Markets Europe, Schroders Greencoat

Fund information

Find out more information on the fund and access key investor documents through our fund centre

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Risk considerations

Commitment funding risk - The fund will have an investor commitment/draw-down funding model which exposes the investment vehicle to the credit risk of its investors. If an investor fails to comply with a drawdown notice, the investment vehicle may be unable to pay its obligations when due.

Higher volatility risk - The price of this fund may be more volatile as it may take higher risks in search of higher rewards, meaning the price may go up and down to a greater extent.

Infrastructure asset risk - The fund invests in illiquid assets which are harder to sell; the investment strategy is therefore specifically designed for buy and hold. Investments have no guaranteed valuation and are subject to capital loss. Investment risk is concentrated on specific sectors, countries, currencies, or companies, with resulting concentration risk.

Infrastructure risk - The fund may invest in sectors that are subject to significant regulation and so changes to such regulation or government policy could have a negative impact on financial performance. Where revenues or cash flows earned or generated by an infrastructure asset depend substantially on the level of use, changes in demand could adversely impact such revenues and cash flows, which could result in losses to the Fund.

Maintenance & renewal risk - During the lifetime of an investment, components of certain infrastructure assets are likely to need to be replaced or undergo a major refurbishment. Timing and costs of such replacements or refurbishments are forecast, modelled and provided for but various factors such as shorter than anticipated asset lifespans or underestimated costs and/or inflation higher than forecast, may result in life-cycle costs being higher than projected.

Market risk - The value of investments can go up and down and an investor may not get back the amount initially invested.

Private market valuations - In times of stress it may be difficult to find appropriate prices for private asset investments and they may be valued on the basis of proxies or estimates.  This may lead to significant changes in the valuation of the fund, or the inability to determine a reliable net asset value which may lead to a suspension of the fund.

Property development risk - The fund may invest in property development which may be subject to risks including, risks relating to planning and other regulatory approvals, the cost and timely completion of construction, general market and letting risk, and the availability of both construction and permanent financing on favourable terms.

Tax risk - The fund and its returns may rely on certain available tax efficiencies at the inception of the Fund which may be subject to changes in tax treatment or interpretations. Any change in the actual or perceived tax status or exposure of the Fund or its investments as well as in tax legislation, practice or in accounting standards could adversely affect the anticipated level of taxation.

Currency risk - The fund may lose value as a result of movements in foreign exchange rates, otherwise known as currency rates.

Derivatives risk - Derivatives, which are financial instruments deriving their value from an underlying asset, may be used to manage the portfolio efficiently. A derivative may not perform as expected, may create losses greater than the cost of the derivative and may result in losses to the fund.

Interest rate risk - The fund may lose value as a direct result of interest rate changes.

Liquidity risk - The fund invests in illiquid instruments, which are harder to sell. Illiquidity increases the risks that the fund will be unable to sell its holdings in a timely manner in order to meet its financial obligations at a given point in time. It may also mean that there could be delays in investing committed capital into the asset class.

Operational risk - Operational processes, including those related to the safekeeping of assets, may fail. This may result in losses to the fund.

Performance risk - Investment objectives express an intended result but there is no guarantee that such a result will be achieved. Depending on market conditions and the macroeconomic environment, investment objectives may become more difficult to achieve.

Sustainability risk - The fund has the objective of sustainable investment. This means it may have limited exposure to some companies, industries or sectors and may forego certain investment opportunities, or dispose of certain holdings, that do not align with its sustainability criteria chosen by the investment manager. The fund may invest in companies that do not reflect the beliefs and values of any particular investor.

Important Information

Marketing material for professional clients only.

This website does not constitute an offer to anyone, or a solicitation by anyone, to subscribe for shares of Schroders Capital Semi-Liquid (the “Company”). Nothing in this document should be construed as advice and is therefore not a recommendation to buy or sell shares. An investment in the Company entails risks, which are fully described in the prospectus.

The Company qualifies as a Société d’Investissement à Capital Variable (“SICAV”) and as an alternative investment fund within the meaning of article 1(39) of the 2013 Law.

Subscriptions for shares of the Company can only be made on the basis of its latest Key Information Document (where available) and prospectus together with the latest audited annual report (and subsequent unaudited semi-annual report, if published), copies of which can be obtained, free of charge, from Schroder Investment Management (Europe) S.A. These documents may be obtained in English, free of charge, from the following link: www.eifs.lu/schroders.

Schroders may decide to cease the distribution of any fund(s) in any EEA country at any time but we will publish our intention to do so on our website, in line with applicable regulatory requirements.

The fund has environmental and/or social characteristics within the meaning of Article 9 of Regulation (EU) 2019/2088 on Sustainability-related Disclosures in the Financial Services Sector (the “SFDR”). For information on sustainability-related aspects of this fund please go to www.schroders.com

Any reference to regions/ countries/ sectors/ stocks/ securities is for illustrative purposes only and not a recommendation to buy or sell any financial instruments or adopt a specific investment strategy.

Past Performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise. Performance data does not take into account any commissions and costs, if any, charged when units or shares of any fund, as applicable, are issued and redeemed.

Schroders has expressed its own views and opinions in this website and these may change.

Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. The data contained in this website has been sourced by Schroders and should be independently verified. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither Schroders, nor the data provider, will have any liability in connection with the third-party data.

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Issued by Schroder Investment Management (Europe) S.A., 5, rue Höhenhof, L-1736 Senningerberg, Luxembourg. Registration No B 37.799.

Distributed in the UK by Schroder Investment Management Ltd, 1 London Wall Place, London EC2Y 5AU. Registration No 1893220 England. Authorised and regulated by the Financial Conduct Authority.