«There has been a lot of interest,» Swiss Life Asset Management's head of infrastructure equity Christoph Gisler (pictured below) said, referring to subscriptions for the latest energy infrastructure fund launched jointly by Swiss Life and UBS.

Clean Energy Infrastructure Switzerland 3 (CEIS3), is open exclusively to institutional investors, such as pension funds and insurers, and has reached a total of 772 million francs ($816 million) in capital commitments by its first subscription deadline, he told finews.com.

Old Into New

Out of that sum, 357 million francs alone is new money. The remaining capital comes from the inaugural CEIS1 fund, which has now been rolled into the new product with its inventory of holdings. Several investors from the very beginning participated in the transfer to CEIS3 and now a total of 38 institutional investors are on board.

The fund will start with a portfolio of eleven investments, including the heating network in Andermatt and Goschenen (Canton Uri), Gisler said.

(Image: Swiss Life Asset Management)

At the time of initial subscription, the new fund amassed more money than its predecessor products during their entire lifetimes. Assets under management in CEIS3 and the ongoing CEIS2 have reached 1.2 billion francs, close to Credit Suisse’s investment foundation, according to Swiss Life and UBS.

Dams, electricity network company Swissgrid, and the utility company Alpiq are where Credit Suisse's 1.7 billion franc pension fund has invested so far.

Strategy 250

In light of the upcoming winter, the huge distortions in electricity prices, and the federal government's rescue package for utility company Axpo, the fund's increased demand doesn't come as a surprise. 

In addition, the Federal Council's Energy Strategy 2050 underscores the longer-term shift toward renewable energy. «It is now common knowledge that the importance of energy infrastructure for Switzerland is high,» Gisler said.

The CEIS3 fund, which is 51 percent owned by Swiss Life Asset Management and managed by the former Fontavis-Team, is benefiting from this environment. It invests in companies and projects in the fields of energy production, such as biomass, hydropower, solar thermal, and photovoltaics, as well as energy efficiency and utility infrastructure, which are usually not listed on the stock exchange. In addition, there is the topic of e-mobility, for example through investments in charging stations.

Mammoth Projects

The investment approach will be incremental, infusing capital gradually until at least 2027. Whether the new fund also buys into mammoth projects in the Swiss Alps to install solar panels onto entire mountain ranges in places like Gondo, Grengiols, and Scuol, among others, is still under consideration. Gisler said the new investment vehicle will also invest in existing and marketable facilities, not just in construction projects.

No Quick Fix

Typically the fund prefers to invest in smaller assets that can be developed over several generations, as has been the case until now, he said. 

The predecessor product, CEIS1, has averaged an annual return of 6.8 percent,  Gisler said, while emphasizing the long-term horizon when it comes to energy infrastructure. «In the short term, not much can be achieved on the supply side.» There is no short-term solution to the electricity shortage, he said. 

A new wood-fired power plant in the Canton of Valais in which Swiss Life and UBS have invested is not scheduled to be connected to the grid until next spring. By then, the challenges of the electricity shortage will hopefully be over.