Iron ore billionaire Andrew Forrest has created a New York-based asset manager that will be charged with raising capital from pension and sovereign funds, and other rich people to support his highly ambitious green energy and green hydrogen plans.
Forrest’s Fortescue Metals still intends to have some 15 million tonnes of green hydrogen production in place by the end of the decade, a plan that could require hundreds of billions of dollars in co-investment to deliver the wind, solar and hydrogen elecrolysers and other infrastructure.
The newly created Fortescue Capital will be led by an experienced private equity funds manager Robert Tichio, who spent 17 years at Riverstone Holdings, a New York based private equity firm that raised more than $42 billion.
Tichio and his team, interestingly enough, will report directly to Mark Hutchinson, the CEO of Fortescue Energy who is now taking an increasingly hands on role on the ambitious roll-out while Forrest himself focuses on the big picture advocacy.
Fortescue Capital will be raising money not just for the company’s big green hydrogen and green ammonia projects around the world, but also for its plan to reach “real zero”, rather than net zero in its mining operations, which means eliminating fossil fuel use entirely from its huge Pilbara mines.
The new fund will enable Fortescue to have stake of between 25 per cent and 50 per cent in its many planned projects, with third-party investors such as sovereign wealth funds, pension funds, endowments, insurance companies and ultra-high net worth family offices owning the rest.
“Fortescue is taking its global pipeline of green hydrogen and green ammonia projects to Final Investment Decision, and in doing so has communicated our intention and desire to bring additional equity investors onboard,” Hutchinson said in a statement.
“Further, Fortescue has previously communicated its planned investment to decarbonise its Pilbara operations, and we see Fortescue Capital as an essential tool of engagement as we embark on both missions.”
The emergence of Fortescue Capital creates a new platform for the Fortescue energy plan, and may also be designed to address some of the analyst concerns who have fretted that its energy plans – despite their importance to the climate and the global energy transition – may return less than the mining operations.
This has become something of an obsession with analysts across the globe, with the narrow focus on near term earnings rather than the big opportunities of the transition and the upturning of traditional business models.
It is impacting already decisions by some of the big US car makers, and Big Oil, who are happy to wallow in near term profits rather than managing and preparing for the long term trends.
Tichio will be joined at Fortescue Capital by a team of climate technology, energy and private market experts, including Nathan Craig, Rael McNally and Jennifer Zarrilli who will all be based in NY with the titles of managing directors.
“Fortescue has demonstrated unmatched leadership in calling for capital formation to support large scale, industrial solutions that can provide durable and high-impact decarbonisation pathways for difficult-to-decarbonise emitting categories,” Tichio said in his statement.
“I am thrilled to join the talented and passionate team at Fortescue to bring these projects to a global set of institutional investors.”
