Stonepeak’s investors are giving it the green light to invest in natural gas due to the energy crisis, says Carolyn Pearce, a managing director at the firm.
“Gas has been more welcomed by a number of investors. Over the last year or so, we’ve seen investors who, five months ago, were saying ‘We don’t want any exposure to gas’, [now] giving us the license to own gas,” Pearce told delegates at PEI Media’s Infrastructure Investor London Forum this week.
With potential electricity shortages, while energy prices and the cost of living shoot up, “people understand that you need to invest in gas”, said Pearce. “Sustainable investing has become more all-encompassing of assets such as gas sitting within Article 8 funds.”
Stonepeak is a signatory of the Net Zero Asset Managers alliance and uses the Science-Based Targets initiative’s guidance for its assets, but has not yet had its targets validated by SBTi. Investors that have now softened their views on natural gas investments “take comfort in the fact that – be it solar or other technologies – over time we will have some sort of transition language that takes those assets across to 2050 and more,” Pearce said.
Stonepeak raised $14 billion for its fourth flagship infrastructure fund, which closed in February. Among its LPs are the Washington State Investment Board ($700 million), the Oregon State Treasury ($500 million) and California Public Employees’ Retirement System ($500 million). Stonepeak closed a global renewables fund on $2.75 billion last year.