Expanding environment-focused investments: Inside LPPI's latest Environmental Opportunities Fund
In a significant move towards tackling climate change, LPPI has announced the creation of an Environmental Opportunities Fund. This new open-ended, multi-strategy private markets vehicle, committed to £500 million, will invest across five key areas: private equity, infrastructure, venture capital, private credit, and natural capital.
Helena Threlfall, who has been at the forefront of designing this fund since joining LPPI in summer 2024, will lead the initiative. Threlfall, with over a decade of experience from her previous role as investment director at a family office, emphasizes sustainable investing aligned with evolving environmental, social, and governance (ESG) principles.
The key objectives of this fund are to invest in solutions that address environmental challenges and contribute to sustainability goals, including climate change mitigation. The team is evaluating potential investments in various sectors, including biodiversity, resource efficiency, and nature-based solutions, as well as carbon credits. However, they are cautious about the current market environment for carbon credits, given the sharp decline in prices over the past two years due to concerns about credibility and greenwashing.
The fund will invest through a mix of third-party managers and co-investments. The first external manager for the fund has already been appointed. The remit of the fund has been kept deliberately broad to reflect the evolving nature of climate-related investments. If traditional natural capital strategies are rebranded without genuine environmental benefits, they are not getting any further towards net zero.
LPPI's approach focuses on identifying and backing companies and projects that generate positive environmental outcomes, especially those linked to climate change solutions, while aiming to achieve long-term value for pension fund beneficiaries. The current expectation is for a relatively equal split between private equity, including venture capital, and infrastructure, with a smaller allocation to natural capital.
The team is optimistic about the direction of the energy transition, stating that many decarbonization technologies already exist and just need scaling. Threlfall stresses that natural capital solutions must have the appropriate climate angle. Nonetheless, she acknowledges that carbon credits may play a growing role in net zero strategies in future.
This new fund is a significant step forward for LPPI, focusing explicitly on tackling climate change. The fund has already secured initial backing from LPFA and Lancashire County Pension Fund. The current investment strategy allows LPPI to engage with multiple asset classes to effectively manage risk and capitalize on innovations and infrastructure that support the transition to a low-carbon economy.
In conclusion, LPPI’s fund aims to advance climate change mitigation through a broad multi-asset strategy that balances environmental impact with financial returns within private markets.
[1] Source: LPPI's official statement on the Environmental Opportunities Fund.
- The Environmental Opportunities Fund, led by Helena Threlfall at LPPI, plans to invest in solutions that combat climate change across various sectors, including biodiversity, resource efficiency, and nature-based solutions.
- Amid concerns about the current market environment for carbon credits, LPPI's team is cautious yet optimistic about their potential role in net zero strategies for the future, as they strive to invest in genuine projects with environmental benefits.
- By adopting a broad multi-asset strategy that balances environmental impact with financial returns, LPPI's Environmental Opportunities Fund seeks to engage with multiple asset classes and capitalize on innovations supporting the transition to a low-carbon economy.
