Nuveen’s C-PACE Lending Fund Secures $525M From Six Insurers

Nuveen and Nuveen Green Capital launched a new fund, which has started with $525 million from six major insurance companies.

The focus is on C-PACE, which stands for Commercial Property Assessed Clean Energy, lending. C-PACE loans can help developers get some rate relief, particularly for construction and construction take-out bridge financing, both for new construction and, in some circumstances, retroactive financing.

Nuveen is the $1.1 trillion investment manager for TIAA, a financial services company that caters to academic, government, medical, cultural and other nonprofit fields. Nuveen Green Capital is a C-PACE lender that Nuveen acquired in 2021.

“The Nuveen CPACE Lending Fund is designed to efficiently aggregate the financing of commercial property-assessed clean energy (C-PACE) projects for the unique requirements of insurance investors, providing a capital efficient opportunity to access investment grade clean energy assets,” the company said.

Nuveen had surveyed “major global institutional investors” and found that 82% of insurers “planned to consider impact investments in the next year.” About 55% of North American insurers consider climate strategy in their investment. And 80% of global insurers were looking at investing in energy innovations over the next two years while 79% expected to move into infrastructure as a focus of their impact investing.

“Insurers are interested in differentiated sources of capital efficient income, and increasingly motivated to address climate change,” said Nuveen Head of Insurance, Americas Joe Pursley in a prepared statement. “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 interest from insurance companies is understandable given how the impact of climate change on storms and weather events has had on the industry.

“The Nuveen CPACE Lending Fund is an exciting evolution in the C-PACE industry and sustainable real estate financing, broadly,” said Alexandra Cooley, CIO of Nuveen Green Capital, in prepared remarks. “We are thrilled to deliver this proprietary investment opportunity to Nuveen’s growing insurance practice. The strategy invests in projects that reduce the environmental impact of buildings by increasing energy efficiency. This lowers operating expenses for businesses, helping them to compete locally and globally, and benefits local communities through the creation of jobs.”