Wealthy Australians Investing in Coal Projects Despite ESG Concerns: Bloomberg

Wealthy Australians are becoming key players in financing coal projects that traditional banks are shying away from due to environmental concerns. Income Asset Management Group Ltd. is one fund manager tapping into this trend, offering private loans to coal and mining companies with returns of 12% to 13% per year.

Despite opposition to coal projects in Australia, the demand for private credit in the sector is on the rise. With renewable energy investments facing challenges, some investors are turning to coal for strong returns. This shift has created a financing pipeline for coal-related projects, attracting non-bank lenders like Farallon Capital Management and King Street Capital Management.

IAM sees an opportunity to connect high-net worth individuals with institutional deals that are typically inaccessible. With over $3 billion in assets under administration, the firm aims to bridge the gap between wealthy investors and projects shunned by traditional lenders.

However, environmental activists caution against investing in coal, warning that the industry is on the decline. Axel Dalman from Market Forces emphasizes that coal is a dying market and that investors may face financial risks by supporting projects that are not sustainable in the long run.

As the private credit market continues to grow, it remains to be seen how individual investors will navigate the risks associated with funding coal projects. With the sector facing increasing scrutiny and opposition, the future of coal financing in Australia hangs in the balance.