IMP Matrix Rating: C2
What: Kayne Anderson Renewable Infrastructure Fund is a listed equity fund that invests in a portfolio of Renewable Infrastructure Companies that are involved in business activities related to renewable energy production, storage, and transmission. These companies include companies that own or operate assets used in the development, generation, production, transmission, storage, and sale of alternative and renewable energy such as solar power, wind power, biofuels, hydropower, or geothermal power. Renewable Infrastructure Companies may also be engaged in businesses related to energy conservation, water infrastructure, conventional power generation, and the sale, distribution, transmission, and marketing of electricity.
Who: The fund’s primary stakeholder is the environment, in particular through reduced emissions via renewable energy production, which can help mitigate climate change.
How Much Impact: Publicly-traded renewable energy infrastructure companies are the largest owners and developers of renewable energy around the world, and their investments to date displace over 600 million tons of CO2 annually. Kayne Anderson does not invest in companies with coal assets without commitment to retirement in <10 years. About 45% of the portfolio are “pure play” renewable companies that operate 100% renewable power assets, 35% of companies have a focus on renewables but derive their power from a mix from a renewables and natural gas, while the remaining 20% contains companies that owns some amount of operating coal capacity. While Kayne Anderson continuously tracks and record material changes to the portfolio companies and updates internal ESG scoring accordingly, but has yet to publish any meaningful impact reporting for this strategy.
Our Contribution: As per any listed vehicle, our additionality is minimal, since anyone can invest freely and easily in and out of the fund.
Impact Risk: The main risk is that Kayne’s engagement with the 20% of companies mentioned above who still have ties to traditional power generation fails in prompting further/faster conversion to renewables. Moreover, this fund is not an activist investor but adopts a more diplomatic approach to influence, which might not achieve the same degree of change.
Sample Investment: Top 10 holdings as of 31/03/2022 are: NextEra Energy, Atlantica Sustainable Infrastructure, TransAlta Corporation, Algonquin Power & Utilities, Albioma, Clearway Energy, China Longyuan Power Group, Tema Energy, AES, Enviva Biomass (the global leader in supplying sustainable wood biomass to the global power sector through long-term contracted infrastructure assets).