Investment manager Nuveen, and its sustainable commercial real estate financing solutions business Nuveen Green Capital (NGC), announced today the launch of the Nuveen CPACE Lending Fund, aimed at enabling insurance investors to finance energy efficiency and sustainability projects for commercial real estate.

The fund is launching with allocations of $525 million from an initial investor group of six major insurance firms.

Joe Pursley, Head of Insurance, Americas, Nuveen, said:

“Insurers are interested in differentiated sources of capital efficient income, and increasingly motivated to address climate change. The Nuveen CPACE Lending Fund mirrors those interests, offering the prospect of long-dated, attractive and stable risk-adjusted returns via an investment grade product that finances energy efficiency commercial real estate projects.”

The launch of the new fund follows Nuveen’s 2021 acquisition of Commercial Property Assessed Clean Energy (C-PACE) financing company Greenworks, rebranded last year as Nuveen Green Capital, aimed at establishing a foothold in the clean energy and energy efficiency lending market. C-PACE is a program that enables building owners to borrow money for clean energy projects such as renewable energy or energy efficiency, with repayments made through an assessment on their property tax bill, providing a more affordable financing alternative to mezzanine debt and equity.

The new fund, designed for the unique requirements of insurance investors aggregates the financing of C-PACE projects that reduce buildings’ environmental impact by increasing energy efficiency, and providing the insurers with a capital-efficient opportunity to access investment grade clean energy assets.

Alexandra Cooley, CIO of NGC, said:

“The Nuveen CPACE Lending Fund is an exciting evolution in the C-PACE industry and sustainable real estate financing, broadly. We are thrilled to deliver this proprietary investment opportunity to Nuveen’s growing insurance practice.”