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Asset Allocation

NBIM Takes Stake in UK-Based Offshore Wind Project

The 37.5% stake in ’Race Bank’ is worth $419 million.
By Matt Toledo



The sovereign wealth fund of Norway is expanding its portfolio of renewable energy infrastructure, purchasing a 37.5% stake in an operational offshore wind farm located in the U.K., Norges Bank Investment Management has announced. The stake is worth 330 million pounds ($419 million).

The project, named Race Bank, started commercial operations in the U.K.  with 91 wind turbines, which collectively generate 573 megawatts of capacity and is enough to power 510,000 homes in the U.K. annually, according to the fund’s announcement.

NBIM purchased its stake in the project from Macquarie Asset Management and Spring Infrastructure Capital Co., which held a 25% and 12.5% stake. Respectively, through their European Infrastructure Fund 5 and Spring Infrastructure 1 Investment Limited Partnership. 

Arjun Infrastructure Partners will remain a co-investor with a 12.5% stake in the project. Energy company Ørsted will maintain its 50% stake in the project. The valuation of Race Bank is approximately 2.599 billion pounds ($3.30 billion) as of the announcement of NBIM’s investment in the project.

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NBIM has 17.733 trillion kroner in assets under management, or roughly $1.633 trillion. The fund made its first renewable energy infrastructure investment in 2021, acquiring a 50% interest in Ørsted-owned and Netherlands-based offshore wind farm Borssele 1 & 2.

Other wind infrastructure projects owned by NBIM include a 49% stake in a portfolio of solar plant and onshore wind projects located in Spain, as well as a 16.6% in German offshore wind project He Dreiht. These investments are a part of NBIM’s renewable energy infrastructure management fund, which invests in renewable energy infrastructure across Europe and North America. 

According to NBIM, the agreement to purchase the stake in the Race Bank project was signed on April 9 and completed on June 14. 

Institutional investors have poured billions into offshore wind projects in recent years. Canadian fund CPP Investments recently consolidated its holdings of offshore wind projects through its subsidiary Reventus Power. According to a report from the Global Wind Energy Council, investment in global offshore wind reached $76.7 billion in 2023, citing data from BloombergNEF.

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Home > News > Pensions > Penn SERS Adjusts Asset Allocation Targets, Makes New Commitments
Pensions

Penn SERS Adjusts Asset Allocation Targets, Makes New Commitments

The fund will decrease its emerging equities exposure target for US equities as it reports a 3.81% return in the first quarter. 
By Matt Toledo



The board of the Pennsylvania State Employees’ Retirement System at its June 18 board meeting approved a commitment of up to $100 million to digital infrastructure investor IPI Partners LLC’s IPI Partners III-A L.P fund. The fund will invest in data center projects and will be a part of SERS real estate portfolio.  

The commitment will increase the fund’s value add/opportunistic sub-strategy of its real estate portfolio to 50.1% from 48%. The fund’s real estate portfolio currently has a 5.5% allocation to REITS, and a 46.5% allocation to core and core-plus opportunities. IPI Partners is a new manager for SERS.  

The pension’s board also approved an adjustment to its asset allocation reducing its target allocation to emerging markets equity by 3 percentage points, while raising its target to U.S. equities by 3 percentage points.  

As of the end of 2023, the fund had a 32% allocation to U.S. equity with a policy target of 31% and policy range of 26% to 36%. Emerging markets equity comprised of 4.6% of the portfolio, with a policy target of 5% and policy range of 1% to 9%.  

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SERS had a 14.1% allocation to international developed equities, an 18.8% allocation to private equity, a 17.8% allocation to fixed income, and a 2.9% allocation to TIPS. Real estate comprised 6.9% of the fund’s assets, while legacy private credit had a 1.1% allocation. Cash had a 1.8% allocation.  

Asset Returns 

SERS announced at its June 11 meeting that it had achieved a 3.81% return in the first quarter of the year. 

Emerging markets equities returns lagged international developed markets and U.S. equities. In the first quarter, emerging markets equities returned 3.43%, while international developed markets and U.S. equities returned 5.43% and 9.68% respectively. These three were SERS’ top-performing assets. 

SERS private credit portfolio returned 2.61%, while private equity returned 2.21%. The fund’s cash holdings returned 1.34% during the quarter.  

TIPS, fixed income and real estate all generated negative returns in the quarter. Inflation protection returned negative 0.17%, while fixed income returned negative 0.18%. Real estate was the worst performer among SERS’ assets, returning a negative 5.61% during the quarter.  

PENN SERS manages $36.4 billion in assets for 242,000 members, who are current and retired public employees of Pennsylvania.  

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Penn SERS Returns 12.2% in 2023 

Penn SERS Earmarks $100 Million for 2 Private Equity Funds 

Penn SERS Loses More Than 12% in 2022 

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