Alternative Energy Lures Pension Funds as Oil Soars

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According to the National Venture Capital Association (NVCA), the so-called 'CleanTech' sector boasts the highest growth in venture capital investments in the last five years.

Record oil prices are drawing money from U.S. pension funds into an array of alternative energy investments, stoking concerns of a possible bubble.

The exposure of pension funds and other institutional investors to alternative energy projects is small but growing with investments in geothermal to hydro, wind, solar, biomass, tidal energy and landfill gas.

According to the National Venture Capital Association (NVCA), the so-called 'CleanTech' sector boasts the highest growth in venture capital investments in the last five years.

High oil prices could accelerate the trend.

"Not only us, but also other pension funds are looking at alternate energy sources. Obviously, it's driven by the cost of oil," said Stanley Mavromates, chief investment officer of Massachusetts' $53 billion pension fund, which has less than $530 million invested now in alternative energy.

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