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Investors to use 'portfolio' to spread brownfield risk

UK CONTAMINATED land specialist Environmental Resources Management and US financial services firm ECAP this week launched a dedicated brownfield fund to win back cautious investors.

The fund, already trialled in the US, is intended to control the risk associated with developing contaminated brownfield sites and so boost investor confidence.

At present, investors back individual remediation schemes.

ERM director John Waters said that while the majority of projects provide good returns on outlay, investors can be hit hard if schemes run into difficulties.

The new ERM/ECAP fund enables investors to put cash into a brownfield 'portfolio', spreading financial risk across several projects.

'If you invest in a single project and it goes pear shaped, you take a hit, ' said Waters.

'If you invest in a whole number, the risk is far smaller.'

Investors have been wary of contaminated sites because of perceived risk.

Consultants have been forced to provide warranties and carry liability for remediation work undertaken (NCE 4 April).

But reducing risk and underpinning profit is the key to boosting brownfield investment.

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