T-REX Trend Report: How to Navigate ESG Investments in 2020

T-REX's ESG-focused issue of the Trend Report provides three imperatives for evaluating investment risks while optimizing returns.

T-REX Trend Report: How to Navigate ESG Investments in 2020
New York, NY, February 27, 2020 --(PR.com)-- T-REX, a leading data services and software provider for complex financial markets, shares insights on investing, data transparency, and technology trends in its latest Trend Report.

Download a complimentary copy of the report at https://www.trexgroup.com/trend-report-esg/.

Report Abstract

Mandates to align investment decisions to specific environmental, social, and governance (ESG) goals has helped support the expansion and maturation of new industries. T-REX supports a broad set of assets in this space-from affordable housing to renewable energy-and is uniquely positioned to understand the complexities supporting this growth. In particular, the renewable energy industry is benefiting from this desire to responsibly deploy capital, with ABS issuance of these assets growing at an annualized rate of 52% since 2015.[1] Beyond this issuance, we see similar upticks in direct lending, private placements and loan syndications.[2] Investors willing to fund and grow these burgeoning industries today are being rewarded with higher yielding investments when compared to more mature asset classes. Our research of publicly available issuance data shows that investors in A rated Prime Solar ABS are in fact achieving 70-90 bps over similarly rated Consumer ABS and U.S. Corporates.[3] What’s more, investors with the resources and data to better understand the assets are investing in BBB solar offerings and picking up additional yield to comparably rated Consumer ABS and U.S. Corporates. But despite the large jump in issuance and attractive yields, risk managers are reluctant to allocate larger investments to renewables without better asset level performance data and integrated workflows.

These trends together warrant a closer look at the asset class. While renewable energy can deliver attractive yields, it requires investors to carefully evaluate unique risks and manage a long-term investment in a cost-effective manner. How can investors set themselves up for success and responsibly deploy more capital to this asset class?

[1] Asset Backed Alert data and internal analysis
[2] Power, Finance & Risk Renewable ABS Roundtable, January 2020
[3] Finsight data and internal analysis

About T-REX

T-REX combines sophisticated cloud-based SaaS technology with big data and asset class expertise to drive down operating and capital expense, reduce risk exposure and enhance performance for complex investments. T-REX solutions address friction at each stage of the asset lifecycle, from origination through investment. By empowering responsible finance, T-REX creates significant investment opportunities across alternative markets. Visit our website to learn about T-REX's Performance Data Service and financial analytics Platform for Structured Credit and Energy & Infrastructure Project Finance.
Nandita Ray