Site menu

Search by ticker code:
Generic filters


Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Fortescue (ASX:FMG) share price in focus on asset management expansion

The Fortescue Metals Group Ltd (ASX:FMG) share price is in focus after announcing a new asset initiative for its green energy segment.

The Fortescue Metals Group Ltd (ASX: FMG) share price is under the spotlight after announcing a new initiative for its green energy segment – asset management.

As a reminder, Fortescue is looking to develop a worldwide group of projects to create green hydrogen (and green ammonia).

Fortescue’s asset management move

The company has set up Fortescue Capital, headquartered in New York City and named Robert Tichio as CEO and managing partner. Tichio had spent 17 years at Riverstone Holdings, a New York based private equity outfit.

The idea is that Fortescue Capital is a green energy investment accelerator platform and an “integral step in Fortescue’s commitment to deliver green energy projects and decarbonisation investments.”

Joining the team will be senior leaders from a background of sustainable infrastructure, climate technology, energy and private markets. The team includes Nathan Craig, Rael McNally and Jennifer Zarrilli.

Tichio will report to Mark Hutchinson, CEO of Fortescue Energy and the operating board of Fortescue Capital.

Fortescue Capital is being developed as a fiduciary for third-party capital, it will complement the energy and metals internal corporate finance teams that already exist and work collaboratively to serve Fortescue shareholders.

The funding models will differ on a project-by-project basis as projects are formally approved by the Fortescue board. Fortescue expects to hold stakes of between 25% to 50% in each project, with third-party investors holding the rest. It’ll be interesting to see how this affects the Fortescue share price over time.

Those potential capital partners include sovereign wealth funds, pension funds, endowments, insurance companies and ultra-high net worth family offices.

Management commentary

The Fortescue Energy CEO Mark Hutchinson said:

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. 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.

What to make of this for the Fortescue share price?

It’s a very interesting move. The company has made investors aware that external investors could be brought in, but this is a fascinating move that allows the business to generate returns from stakes that it no longer owns.

If Fortescue can recycle capital effectively, this method of bringing third party investors on board could be a smart move, if it brings on the right investors and executes well on the projects. There are some key questions such as who pays for the developments (and when)? How will Fortescue selling green hydrogen to its customers work – will it act as a middle man (and generate earnings from that too)?

If it means Fortescue can supersize its green energy ambitions, then it’s a good move. As a shareholder, I’ll be following along closely.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz owns shares of Fortescue.
Skip to content