OMERS Private Equity invests $100M in NovaSource Power Services

A deal by the buyout arm of Ontario's pension fund shows how it is going deep into solar while paring back on fossil fuels.

What's happening: OMERS' private equity unit has acquired a minority stake in NovaSource Power Services, a major operations and maintenance provider for the solar energy sector.

Why it matters: The $100 million deal is another example of the renewable sector as an attractive space for the kind of steady, long-term returns that appeal to pension funds. It's also consistent with OMERS' move away from fossil fuels.

Background: NovaSource says it's the largest independent solar O&M, with 20 GW of solar assets under management. OMERS is one of the world's largest pension funds, and its private equity arm has more than $15 billion AUM.

Zoom in: OMERS has cut its holdings in publicly traded fossil fuel companies by 17% since last June, per the reporting team at Corporate Knights.

• The pension group has announced plans to sell its stake in Scotia Gas Networks in the U.K. and the GNL Quintero gas import terminal in Chile. In July, it disclosed the sale of its stake in the Midland Cogeneration Venture in Michigan, the largest gas-fired cogeneration plant in the U.S.

Meanwhile: Public pensions and sovereign wealth funds invested $9.77 billion in clean energy last year — nearly double from the year before and flat compared to 2019.