Global investment manager Nuveen announced a strategic partnership with the California State Teachers’ Retirement System (CalSTRS), under which CalSTRS will commit up to $2 billion to sustainable infrastructure investments, serving as a anchor investor for Nuveen’s Energy & Power Infrastructure Credit Fund II (EPIC II).
In addition to the EPIC II fund, the new partnership also positions CalSTRS to anchor future complementary investment strategies to support critical infrastructure for the clean energy economy, the firms added.
The new partnership will target a broad range of sustainable infrastructure opportunities, including renewable power generation, energy storage, industrial decarbonization, energy efficiency solutions and circular economy investments. The partnership will also support the onshoring of infrastructure supply chains, domestic manufacturing, and the build-out of artificial intelligence and the digital economy.
Don Dimitrievich, Global Head of Nuveen Energy Infrastructure Credit, said:
“The rapid expansion of artificial intelligence, the onshoring of manufacturing and industrial supply chains, and the broad electrification of the economy are collectively creating a generational need for new infrastructure investment. We believe private credit is uniquely positioned to play a leading role in financing that buildout while also achieving positive sustainable outcomes. We are thrilled to work with CalSTRS as a long-term partner to scale strategies that seek to deliver strong risk-adjusted financial performance while also investing in communities and businesses to make energy more readily accessible and clean for all stakeholders.”
CalSTRS said the partnership aligns with its long-term objective of generating attractive risk-adjusted returns for more than one million California public-school educators and beneficiaries, while also catalyzing positive sustainability results and reducing or avoiding emissions. With U.S. power demand relating to AI and digitalization projected to double or triple over the next decade, CalSTRS added that the investment opportunity is also strongly aligned with the needs of long-term institutional investors, whose duration and return objectives suit infrastructure credit, while also providing an opportunity to support clean and critical infrastructure that makes energy more accessible and secure.
Nick Abel, Investment Director at CalSTRS, said:
“We believe sustainable infrastructure credit requires specialists’ expertise to originate, underwrite and structure bespoke capital solutions. Sustainable infrastructure credit also represents an important allocation for CalSTRS as we seek to generate strong risk-adjusted returns and contribute to a cleaner, more resilient, and affordable clean-energy economy.”
