New chair Cath Bowtell eyes global energy transition deals for IFM Investors
The $217bn IFM Investors will ramp up its transformation into a global company as it pursues investments in energy transition in Australia and overseas under new chair Cath Bowtell.
The $217bn IFM Investors will ramp up its transformation into a global company as it pursues investments in energy transition in Australia and overseas under new chair Cath Bowtell.
The fund, which is owned by some of the country’s largest industry super funds and handles investments for more than 600 pension fund clients globally, has carved out a global reputation for its investment in infrastructure.
In an interview with the Australian, Ms Bowtell, a former ACTU official and industry super veteran who was the Labor Party candidate for the federal seat of Melbourne in the 2010 and 2013 elections, said IFM was increasing its focus on investing for the energy transition, including renewable energy.
“We are putting a lot of thought and planning into being a provider of capital to the decarbonisation agenda,” she said.
“There is such a need for capital both here in Australia and across the globe.”
Ms Bowtell takes over as chair of IFM on July 1, following the resignation of former federal Labor minister and ACTU leader Greg Combet, who is leaving the role to become the full-time chair of the federal government’s new Net Zero Economy Agency.
Ms Bowtell said IFM had been investing heavily in its capacity as a global business in recent years, and this was set to increase as its funds under management grew.
“We are transforming from what was an Australian company with global outposts to a truly global company with a global mindset and a global operating model,” she said.
IFM’s push into the energy transition includes its investment in assets such as its $8bn deal for Spanish power and renewable energy company Naturgy Energy and US biogas company GreenGas, as well as moving to increase the use of solar power in the assets it owns, such as airports.
“It’s investing in decarbonisation both with the way we manage our assets but also finding opportunities to buy where we know those assets are going to be part of the transition,” she said.
“The theme is very dominant in our investment team because they can see the weight of capital which is going to be needed (for the energy transition).
“Governments around the world are not going to be able to do it themselves and they’re going to be looking to private capital to partner with them.”
A director of IFM since 2019, Bowtell was deputy chair of the organisation and chair of its people and remuneration committee.
She is also chair of the Royal Women’s Hospital in Melbourne, the Industry Fund Services Group and The New Daily.
IFM has also announced that former Labor finance minister, Lindsay Tanner, will be joining its board as a director.
Tanner, who was a special adviser to global financial advisory firm Lazard for more than 10 years, is currently a director of the Suncorp Group and Virgin Australia, as well as chair of AFL Victoria.
Set up over 25 years ago as an investment vehicle for industry super funds, IFM is now a global investor with more than 800 staff and offices around the world, including New York, London, Berlin, Zurich, Amsterdam, Hong Kong, Seoul, and Tokyo.
It has become known for its expertise in investing in infrastructure, which now accounts for some $101bn of its current $217bn portfolio.
It has a total of $88bn in debt and listed equities with the rest in private equity investments.
Ms Bowtell, a former director of AustralianSuper, rejected suggestions that investing in energy transition assets such as renewable energy would have to come at a cost to profitable returns.
“We are long-term investors, and we take a long-term view,” she said.
“But these assets are performing well in the portfolio because we are able to pick the technologies that are the transformation technologies.
“We are not waiting for them to perform well in the portfolio.”
One of IFM’s early high-profile investments in green energy was in 2005 when it won a $788m deal to buy former ASX-listed renewable energy company, Pacific Hydro, after a contested takeover battle.
Concerned about the outlook for renewable energy in Australia after the Abbott government cut the renewable energy target, IFM wrote down its stake in the company by $685m in 2014. But it ended up making a profit on the deal, selling the company to China State Power for a reported $3bn in 2015.
Ms Bowtell said IFM, which was a part of the consortium that bought Sydney Airport in a $24bn deal last year, was well-placed to become involved in other major deals where it could invest in its own right as well as alongside other like-minded investors.
“There is no way that governments will be able to fund all the things they need to do in terms of decarbonisation or demand for other services and social infrastructure,” she said.
“There is a demand for private capital.
“If we can work with governments here and in other jurisdictions to co-design the investment vehicles which will deliver us good returns on a risk-adjusted basis and also deliver national priorities, it is a good thing.”
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