Funds News

CF Partners expands fund into broader energy markets

LONDON (Reuters) - Carbon and energy investment firm and adviser CF Partners has expanded its carbon fund, CF Carbon Fund II, to invest in oil, gas, power and coal markets, the London-based firm said on Monday.

As a result of low prices, many European carbon market participants have been branching out into other markets.

“The fund’s diversification is part of CF Partners’ wider strategy of building on its core expertise in carbon to roll-out new products that meet the growing demand from clients for broader access to the commodities markets,” the company said in a statement.

The fund will now be known as CFP Energy Limited. CF Partners plans to launch a second, commodities-focused investment vehicle later this year, it said.

So far, CFP Energy has invested in 57 renewable energy projects in China, South East Asia, India, Eastern Europe and South America.

These projects can earn carbon credits, called certified emission reductions (CERs), if they qualify under a U.N.-backed offset scheme aimed at spurring greenhouse gas emission reduction investment in developing countries.

Companies and governments in the developed world can use CERs to help meet their climate targets at home or sell them in the secondary market.

CF Partners holds over 45 million contracted CERs, which are worth over 120 million euros (94 million pounds), it said.

However, CER prices have lost almost 70 percent of their value over the past year. The market has been hit by a record supply of credits and flagging demand, as Europe, the biggest buyer of CERs, grapples with its worst fiscal crisis in decades.

The benchmark CER contract was trading at 2.90 euros a tonne on Monday.

In March, CF Partners told Reuters it was preparing to launch a renewable energy investment product and a commodity fund, as it sought to expand further in the broader commodities markets.

Last year, CF Partners expanded its carbon market activities to cover the power, gas and coal markets.

Reporting by Nina Chestney; editing by Jason Neely