08 Apr 2024

Fidelity International raises €200m with second real estate climate impact fund

London, 8 April 2024: Fidelity International (“Fidelity”) today announces the launch of its second real estate climate impact fund, the Fidelity Real Estate Logistics Impact Climate Solutions Fund (the “LOGICs” fund), successfully raising €200m¹ during its first close, supporting an accelerated energy transition in the real estate sector. Rest Super, one of Australia’s largest profit-to-member superannuation funds, is a cornerstone investor in the Fund and is committing €80m to the Fund at first close, with an agreement to commit up to a further €120m to the Fund over the subsequent closes.

With over 40% of total carbon emissions being emitted from real estate², the asset class plays a pivotal role in the race to net zero. But with 85% of buildings in the EU over 20 years old³, there is an urgent and appealing investment opportunity to help turn brown to green.

The LOGICs fund, which will invest solely in the logistics sector across core Western European⁴ markets, will follow a value-add approach of acquiring existing assets with the intention of refurbishing and repositioning to deliver high quality assets that are capable of being operated at net zero carbon. In addition, through the installation of solar panels, occupiers have the opportunity to generate and deliver their own source of green energy.

As a Sustainable Finance Disclosure Regulation (SFDR) Article 9 fund, LOGICs has a comprehensive climate impact framework for the refurbishment of real estate, which seeks to leverage and align with external frameworks and certifications, including the EU taxonomy, to ensure its approach to delivering climate impact is transparent and measurable. Each asset purchased will have an accelerated pathway to net zero carbon emissions through the firm’s refurbishment plans.

According to Fidelity research, brown logistics buildings are currently trading at an attractive entry points, 20-30% below peak valuations in 2022. Meanwhile Western Europe is benefiting from multiple demand tailwinds including the continued growth of e-commerce and a post pandemic focus on supply chain resilience. With supply of quality logistics assets constrained, Fidelity anticipates further strong rental growth for well-located, green warehouses. These two factors combined creates a rare opportunity to deliver outsized returns for modest risk over the next few years.

The news follows the launch of the Fidelity European Real Estate Climate Impact Fund at the end of 2023.

Andrew McCaffery, co-Chief Investment Officer, at Fidelity International, comments: “The LOGICs fund launch is a great example of partnering with our clients to jointly develop solutions to meet their evolving investment needs. We are pleased to see strong and growing client interest for our climate impact strategies within real estate, supporting the energy transition in the sector through accelerating purchased assets’ pathway to net zero while offering compelling investment returns to our clients. Following a strong first close, investors will have the opportunity to invest in the Fund’s second close towards the end of the year.

“With approximately €550m of deployable capital within our real estate climate impact strategies, we are excited by the opportunity to take advantage of current market conditions and deliver strong returns as well as tangible carbon reduction within an accelerated timeframe.”

Andrew Lill, Rest’s Chief Investment Officer, comments: “Rest is pleased to join Fidelity to launch the LOGICs fund as its cornerstone investor. We believe its focus on climate impact offers a fantastic opportunity to benefit Rest’s approximately two million members, including the more than a million who are younger than 30 and will retire into a post-2050 net-zero world.

“With logistics properties trading at attractive rates and demand for energy efficient facilities growing, we believe the LOGICs fund will drive rental yields and property values that should translate into strong financial returns while helping to speed up the path to a carbon neutral economy.”

Important information

For professional investors only

The value of investments and the income from them can go down as well as up so you/the client may get back less than you/they invest.

This fund invests directly in property, which can be difficult to sell and the value is generally a matter of opinion rather than fact.

The Investment Manager’s focus on securities of issuers which maintain favourable ESG characteristics or that are sustainable investments may affect the fund’s investment performance favourably or unfavourably in comparison to similar funds without such focus. When referring to sustainability – related aspects of the promoted fund, the decision to invest should take into account all characteristics or objectives of the promoted fund as detailed in the Prospectus. Information on sustainability-related aspects is provided pursuant to SFDR at https://www.fidelity.lu/SFDR.

Past performance is not a reliable indicator of future returns. The fund's returns may increase or decrease as a result of currency fluctuations.

The Fund does not offer any guarantee or protection with respect to return, capital preservation, stable net asset value or volatility.

There can be no assurance that a Fund's investment objective will be achieved.

The long-term nature of delivering returns across the economic cycle and the use of financial derivative instruments as part of an investment strategy may result in a higher level of leverage and increase the overall risk exposure of the Fund and the volatility of their Net Asset Value.

Market risk from adverse economic impact could cause an unfavourable swift to demand and price movements.

Liquidity risk due to assets may not be tradable quickly enough in the market we invest or traded on unfavourable prices.

Funding risk applicable through unpredictable timing of cash flows over the life of this fund. Additionally, if financing is structured to meet debt repayments, then this could increase the liquidity risk as well.

Interest rate risk as it may affect the financing cost and derivation of capitalization rates which has a direct impact on demand dynamics of real estate climate impact funds.

The Fund is not available to retail investors in Australia.

-Ends-

¹Figure rounded to the nearest €1m.
²International Energy Agency, December 2020
³ EU Commission, October 2020
⁴ LOGICs will invest in Western European countries with a strong bias towards, France, Germany, Netherlands and the UK.

Notes to editors

For more information:
fidelity@stampacommunications.com
+31 20 404 2630

About Fidelity International

Fidelity International offers investment solutions and services and retirement expertise to more than 2.9 million customers globally. As a privately held, purpose-driven company with a 50-year heritage, we think generationally and invest for the long term. Operating in more than 25 locations and with $776.2 billion in total assets, our clients range from central banks, sovereign wealth funds, large corporates, financial institutions, insurers, and wealth managers, to private individuals.

Our Workplace & Personal Financial Health business provides individuals, advisers and employers with access to world-class investment choices, third-party solutions, administration services and pension guidance. Together with our Investment Solutions & Services business, we invest $560.4 billion on behalf of our clients. By combining our asset management expertise with our solutions for workplace and personal investing, we work together to build better financial futures. Data as at 31 December 2023. Read more at fidelityinternational.com

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Important Information

Fidelity Real Estate Logistics Impact Climate Solutions Fund SCA SICAV-SIF, the “Fund”, is an investment company with variable capital – specialised investment fund (société d’investissement à capital variable – fonds d’investissement spécialisé) in the form of a partnership limited by shares (société en commandite par actions) under the laws of the Grand Duchy of Luxembourg; and qualifies as a closed-ended alternative investment fund or “AIF” under the AIFM Law pursuant to the 2007 Law.

FIL Investment Management (Luxembourg) S.A., a public limited company (société anonyme) incorporated under the laws of the Grand Duchy of Luxembourg, registered in Luxembourg under the company number R.C.S. Luxembourg B88635 has been appointed by the Fund, in accordance with the AIFM Agreement, to serve as the Company’s Fund’s alternative investment fund manager, the AIFM.

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FIL Investment Management (Luxembourg) S.A. reserves the right to terminate the arrangements made for the marketing of the sub-fund and/ or its shares in accordance with Article 93a of Directive 2009/65/EC and Article 32a of Directive 2011/61/EU. Prior notice of this cessation will be made in Luxembourg.

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Real Estate Sustainable Policy: https://www.fidelityinstitutional.com/static/master/media/pdf/download-material/Fidelity-Real-Estate-Sustainability-Policy-2021.pdf

Information on sustainability-related aspects pursuant to SFDR and product-specific sustainability related information can be found on the website: : Fidelity Real Estate Logistics Impact Climate Solutions Fund

Global Real Estate Sustainability Benchmark "GRESB" scheme, independent external benchmark used to measure the ESG efficiency.

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