BlackRock’s Martin Torres and CPPIB’s Bruce Hogg share fund insights

Last week we held our Financing Wind North America conference. One of the most interesting sessions was on the first day as Frank Getman, president and CEO at Great Bay Renewables, spoke to Bruce Hogg, managing director and head of power & renewables at CPP Investment Board, and Martin Torres, head of the Americas for renewables at BlackRock Real Assets.


September 10, 2020

A Word About Wind held its Financing Wind North America conference, in association with headline sponsor UL, last week.

More than 50 speakers joined us over two days to discuss the biggest issues in North American wind – and, if you were there as a Premium delegate, you can still catch the sessions on our networking site.

One of the most interesting was on the first day as Frank Getman, president and CEO at Great Bay Renewables, spoke to Bruce Hogg, managing director and head of power & renewables at CPP Investment Board, and Martin Torres, head of the Americas for renewables at BlackRock Real Assets.

The session covered the changing market, storage, and future of tax equity – and started by looking at environmental, social and governance (ESG) at funds.

Around C$6bn ($4.5bn) of the C$434bn ($328bn) assets that CPPIB has under management are renewables, and it plans to grow this to C$20bn ($15bn) by the end of 2025, mostly in developed markets. CPP Investments isn’t a ‘green fund’, but Hogg said ESG is vital when it makes investment decisions as it is pursuing a strategy that invests over a 75-year horizon, so the climate is key.

He said this tallied with a trend CPPIB in the public markets: “If you’re ESG positive, more money’s available. If you’re ESG negative, less money’s available.”

BlackRock’s focus is different as it operates dedicated renewables funds in a wider range of investment products, and has invested $6bn-$7bn in renewables globally in the last decade. Most of its funds invest over ten to 12 years, and most focus on established markets. BlackRock’s CEO Larry Fink has also made its commitment to ESG clear in high-profile statements in early 2020.

Torres said an increased focus on ESG by its institutional clients means it has had to adapt its approach to ESG reporting, from a focus on tonnes of carbon or water saved to a more nuanced view on the impacts on communities and ecosystems: “We’re trying to provide a more fulsome picture,” he said.

Competitive market

Both then discussed how their strategies are evolving as more investors move into renewables.

Hogg said renewables is still “somewhat cyclical” for investors as some sectors come into favour due to changes in investor appetite or other changes.

He said CPPIB is comfortable getting into projects early in the development cycle when it has a strong relationship with development partners, but doesn’t chase returns by taking on risks it isn’t comfortable with. But he said the move from a subsidy-based environment to a world with more merchant risk means that investors will need to cope with greater volatility.

The Canadian pensions giant has historically focused more on wind because it could generate higher returns, but now it sees little difference between wind and solar, the latter of which is increasingly paired with storage. In future, he expects more change as firms respond to increasing levels of merchant risk.

As he bluntly put it: “I think I’d be stupid if I’d developed a strategy where I expected to invest the same in year one as year five.”

Torres echoes the view that the types of investments are changing, and that a lot of investors now see utility-scale solar as lower risk than working wind farms. He said BlackRock also sees battery storage as complementary to both, and so it would be comfortable to invest in standalone storage developments.

“We’re not venture capitalists looking to take the risk to commercialise a particular technology but, if they’re proven, then [we can marry] the proven technology with the revenue contracts and then create the appropriate capital structure,” he said.

Finally, the session ended with a brief chat about tax equity, which Hogg said has been hit by COVID-19: “We’re starting to see tax equity roll off and, from a financing point of view, one of the biggest things we’re looking at is the depth of the tax equity market,” he said.

“One obvious knock-on from COVID is a lot of companies are less taxable than they were… Even without changes the market is rolling off and is stretched.”

Wind may be a developed asset class – but there are plenty of challenges for fund managers to grapple with.


In late 2020, A Word About Wind will mark the brightest stars in the ‘green fund’ community in our Green Fund Power List. This top 100 will celebrate the best managers of green funds who are driving major investment in wind, solar and storage. Want to nominate? Get in touch to find out more.

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