Andrew Forrest charges into asset management with Fortescue Capital

afr.com:

Andrew Forrest’s Fortescue says it is expanding into asset management, part of the iron ore and energy group’s strategy to fund green investments.

Fortescue Capital will raise and deploy million-dollar sums into projects backed by the company, Mark Hutchinson, Fortescue’s energy chief executive, told The Australian Financial Review.

Fortescue’s energy chief Mark Hutchinson (left) has hired private equity dealmaker Robert Tichio, to spearhead the company’s new asset management arm, Fortescue Capital. 

Based in New York, Fortescue Capital will be led by Robert Tichio, who spent more than 17 years and raised about $US43 billion at private equity firm Riverstone Holdings. He is also the chairman of struggling fast-charging company Tritium.

Mr Tichio and his team will tap sovereign wealth funds, pension funds, endowments, insurers and wealthy families for capital to invest in Fortescue projects, and eventually form dedicated funds that would be invested on behalf of limited partners.

“It goes to the question we get asked all the time: ‘How are you going to pay for all these ambitions you have in the green molecule space,’” said Mr Hutchinson.

“As we think about our pipeline for the next few years, [Fortescue Capital will] really be the funding mechanism for us.”

But Fortescue’s venture into asset management follows departures at its green energy business, the roll-back of a multibillion-dollar wind and solar farm this month, and shareholder concerns that the company’s foray into lowering carbon emissions will shift focus from its iron ore operations.

“We’ve made it clear, this is an important initiative for the company. We want to do both,” Mr Hutchinson said, referring to Fortescue’s ambitions in metals and renewable energy.