UBS, Fontavis and Mobiliar Launch Pioneering Investment Solution:

UBS Global Asset Management, together with its partners Fontavis and Schweizerische Mobiliar, is launching a pioneering investment solution. UBS Clean Energy Infrastructure Switzerland (UBS-CEIS) offers institutional investors unprecedented access to a diversified portfolio of Swiss infrastructure facilities and companies in the field of renewable energies and energy efficiency.

Future Energy Market as an Opportunity for Institutional Investors in Switzerland

In the energy sector, Switzerland is faced with major energy challenges. The “energy transition” will result in high investment needs in the coming years. New and long-term financing models are required to expand investment in renewable energy, upgrade grid infrastructure and improve energy efficiency. Pension funds, insurance companies and other institutional investors in Switzerland are also facing challenges; although 2012 brought welcome profits, interest rates remain at historic lows, equities continue to be volatile and prone to setbacks, while Swiss real estate investments are relatively expensive. "Many institutional investors in Switzerland are having difficulties generating the appropriate risk-adjusted returns needed," explains Beat Götz, head of Institutional Business, UBS Global Asset Management Switzerland.

By launching UBS Clean Energy Infrastructure Switzerland, UBS Global Asset Management is fulfilling a key need of institutional investors. For the first time, they can conveniently invest in projects and non-listed companies involved in energy supply (including biomass energy, hydropower, solar thermal energy and solar power), energy efficiency and supply infrastructure. "The potential for solid returns and stable cash flows with manageable risks is attractive," says Götz.


What is more, pension funds in recent years have repeatedly expressed the desire to make investments, which, apart from generating yield, will also demonstrate their responsibility as investors in and for Switzerland. Trendsetting investment solution UBS Clean Energy Infrastructure Switzerland is a limited partnership for collective capital investments under the Swiss Collective Investment Act (KAG). "We have opted for a closed fund structure under Swiss law supervised by FINMA. It is tailored to long-term oriented, qualified investors, with investments in non-listed companies and infrastructure facilities," says Stefano Tritella, CEO of UBS Clean Energy Infrastructure Switzerland AG. The investment solution is unique in the Swiss market, he emphasises, because it builds bridges between institutional investors looking for sustainable returns, and energy providers, grid operators and other market participants in the Swiss energy sector. These market participants are faced with high investment costs for upgrading and expansion and are therefore interested in equity or equity-like funds for their development.

 

Partnership with Established Specialists

 

UBS Global Asset Management developed the new investment concept with selected partners especially for the Swiss market. It is responsible for client support and running the investment structure. To this end, UBS Clean Energy Infrastructure Switzerland AG was established in Basel as a dedicated company acting as general partner. For the Swiss market, UBS has entered into a long-term partnership with Fontavis AG. Fontavis is an independent investment advisor and asset manager based in Baar, which focuses on sustainable investments in non-listed companies in the field of renewable energy, energy efficiency and energy infrastructure in Switzerland.

Schweizerische Mobiliar complements this partnership and acts as lead investor with a substantial investment amount. It also supports Fontavis with its own engineers who specialise in power and heating plants in providing risk assessments and insurance analysis for potential target companies. It also offers such companies its services as an insurance partner.

 

"UBS, Schweizerische Mobiliar and Fontavis complement one another well", explains Thomas Schmid, founding partner and chairman of the management of Fontavis AG. "As the investment advisor of UBS Clean Energy Infrastructure Switzerland AG, Fontavis adds its special know-how and broad network to the partnership, evaluates investment options and manages the investments. For energy suppliers and project owners, we are a long-term, reliable partner without any primary interest in the energy exploitation rights."

 

Broad interest and Healthy Subscription Volumes

 

There is strong interest in tangible, real asset investments that have potential for stable returns in Swiss francs and that have a low correlation with traditional investment classes. By the first closing date for subscriptions on 31 December 2012, capital commitments had reached around CHF 250 million. Among the 18 institutional investors who subscribed are private and public pension funds and insurance companies. The fund will be open for further closings in 2013.