Fortis Investments has announced the launch of a sustainable energy fund in a bid to capitalise on the strength of the renewable sector.

A number of asset managers have recently launched sustainable energy funds, including the Schroder Global Climate Change, F&C Global Climate Change Opportunities and Pictet Clean Energy fund. According to Lipper Feri figures for the first half of 2008, the European renewable funds industry saw net inflows of €379 million at a time when tens of billions of euros were taken out of equity funds across the continent.

The growth in the sustainable energy funds has mainly been attributed to strong government subsidies, good management of renewable companies and finally, ethical considerations. Fortis Bank, the parent company of Fortis Investments, says it is demonstrating its commitment to climate change prevention by investing €50 million towards Clean Energy Fund's €400 million subscription target.

The fund will focus the bulk of its assets on wind, small hydro, solar photovoltaic and biomass. However, to diversify risk, the fund will have an exposure to technologies, geographies and currencies, mixing capital appreciation and cash flow generation to achieve a solid risk return profile.

And while the fund will centre its portfolio on European clean power assets, it will have a global reach with the option to seek opportunities in emerging markets and technologies.

The fund will be managed by a team of five London-based Fortis managers with technical and private equity experience. Furthermore, an ‘external advisory panel’, comprised of renewable industry experts, has been set up to counsel the five managers on the latest developments in the clean energy and the environmental sector.

Peter Dickson, Technical Director of the Clean Energy Fund, commented: ‘We believe that the outlook for investing in clean energy projects is very favourable given its underpinning by environmental and social necessity and by government legislation.

‘In particular, EU legislation proposals are now aimed at achieving 20% of energy production from renewable sources. As governments and policy makers set objectives for achieving renewable energy targets, pension funds and other institutional investors can benefit from the long-term growth in the sector.’