CPPIB Launches Sustainable Energy Group

The Canadian pension giant is merging two business units to create the C$17.7 billion investment division.

The C$475.7 billion ($378.4 billion) Canada Pension Plan Investment Board (CPPIB) is combining its
Energy & Resources and Power & Renewables groups to launch a new investment group called the Sustainable Energy Group (SEG) that will have approximately C$17.7 billion in assets under management (AUM).

The new group will be led by Power & Renewables’ managing director Bruce Hogg, who will assume the title of managing director, head of Sustainable Energy Group. Hogg joined CPPIB in 2007 as managing director, head of infrastructure – Americas. Of SEG’s C$17.7 billion in assets under management, approximately C$9.2 billion comes from the former Power & Renewables unit, with the remaining C$8.5 billion coming from the former Energy & Resources unit.

CPPIB said Avik Dey, managing director, head of Energy & Resources, will act as senior adviser to CPPIB over the next six months before stepping down to “return to his entrepreneurial roots.”

The Sustainable Energy Group will have five key sub-sector strategies: power and renewables, energy midstream, commodities and alternative fuels, distributed energy and services, and innovation technology and services.

Power and renewables includes renewable power generation, including onshore/offshore wind, solar, and hydro power. It also includes grid scale battery solutions and thermal power generation. The energy midstream sub-sector includes traditional energy midstream, liquefied natural gas, carbon capture and sequestration. And commodities and alternative fuels includes oil and natural gas, agriculture, and alternative fuels such as renewable diesel and natural gas.

The distributed energy and services sub-sector includes distributed generation,  industrial services and efficiency, and mobility, while innovation technology and services includes earlier stage/growth investments, thought leadership on evolving energy business models, and advancing other Sustainable Energy Group strategies.

Investment examples include Wolf Midstream, an investment vehicle launched in 2015 to invest in midstream energy infrastructure assets in Western Canada. Wolf constructed and operates an integrated large-scale carbon capture, utilization, and storage system. Another example is Pattern Energy, a US-based independent renewable energy company with 3.4 gigawatts of operating wind and solar projects in North America and Japan. Pattern owns, operates, and develops renewables assets worldwide, and has been pursuing new developments in wind, solar, transmission, storage, and advanced energy technologies.

“The creation of the Sustainable Energy Group with significant, flexible capital positions us extremely well to pursue the best market opportunities across the entire energy spectrum,” Hogg said in a statement. “This, coupled with a deep, highly experienced team, will allow SEG to generate significant long-term value for the fund.”

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