Over the next five years, nearly 70% of UK pension fund investors expect allocations to renewable energy to increase, according to findings of new research from Alpha Real Capital.
The top two investment areas for the next five years are expected to remain as solar and onshore wind.
In the UK, 74% of those surveyed by Alpha said they already invest in the renewable energy sector, with 30% describing it as “mature”, 52% classifying it as “developing” and 18% as “early stage”.
The study found that key attributes identified by those surveyed included the ability to invest in strategic infrastructure, access attractive risk adjusted returns, benefit from asset diversification, and the ability to deliver stable income returns.
Alpha Real Capital renewables head Will Morgan said: “Our research supports the view that professional pension fund investors see the UK renewables sector as offering attractive investment opportunities, and plan to increase their exposure here.
“We are seeing growing interest from a range of pension funds in our renewable energy investments.”
Alpha’s renewables business invests in wind, solar, hydro and other low carbon energy resources and it has completed over 50 transactions and invested more than £550m into a portfolio of over 225MW.
Alpha Real Capital CEO Phillip Rose added: “Renewable energy infrastructure is an attractive secure income asset with predictable cash flows, significant inflation linkage and good duration that complements Alpha’s other secure income platforms in commercial ground rents, social infrastructure and real asset-backed debt.”