IFM Investors has $50 billion in assets under management and is owned by 30 pension funds with more than 5 million Australian members, including funds such as AustralianSuper, Cbus and HostPlus.

The hefty valuation changes to Pacific Hydro - which has hydro, wind, solar and geothermal projects in Australia, Brazil and Chile - were driven partly by businessman Dick Warburton's review into the renewable energy target. His report is with the government for its consideration.

IFM Investors chief executive Brett Himbury said the review had undermined confidence for renewable energy investors.

"There's two primary factors [impacting the Australian assets]: a lowering of energy demand and uncertainty around the current laws," he said.

"It's a great shame that at a time when the likes of President Obama are saying there's no bigger challenge for the globe than climate change, we've got this policy uncertainty."

On August 28, the Warburton RET review made two recommendations to the government: either allow the large-scale RET to continue to operate until 2030 for existing and committed renewable generators, but close it to new investment, or modify the fixed target for 20 per cent renewable energy by 2020 to a "real 20 per cent" of actual electricity demand.

Both of these outcomes would be negative for the renewable energy sector. Pacific Hydro has assumed a "20 per cent real" RET in its valuation.

The "real target" would reduce the annual production of renewable energy in 2020 from 41,000 gigawatt hours to about 27,000GWh.

Compounding the sector's woes, the Australian Energy Market Operator in June made big cuts in its annual forecasts for electricity demand over the next decade.

The combined impact of lower anticipated energy demand and assuming a "20 per cent real" RET have hit the valuation of Pacific Hydro by $220 million.

"We'd like to see continued commitment to the current bipartisan agreed target and more broadly as investors we'd prefer to see a relatively certain [regulatory] environment," Mr Himbury said. "As long-term investors you'd like to think that there is economic value in renewable energy, but what we need is clarity and certainty."

Infigen Energy boss Miles George has previously warned that an overhaul of the target would be "disastrous" for the industry and push investment overseas.

Infigen, one of Australia's biggest wind farm operators, has warned it could breach its debt covenants within three months if the RET is wound back without compensation for investors.

The renewable energy industry has warned any moves to scrap the target would jeopardise $15 billion in renewable energy investment.

The RET review also contributed to a further $60 million write-down on the value of the company's development portfolio in Australia and South America.

"Under the current environment it wouldn't be economic to bring the development book to market. There's a knock-on effect that could impact thousands of construction jobs," Mr Himbury said.

Grattan Institute energy director Tony Wood said the proposed Warburton RET changes were not just a headache but entering "serious migraine territory" for anyone exposed to renewable energy investments.

"It's not like a slight change in the offside rule in AFL or NRL. This is changing the game," he said.

"Existing projects are almost certainly not making money at the moment. The REC [renewable energy credit price] is suppressed because there is an oversupply of credits, and renewable energy itself has suppressed the wholesale [energy] price. It's good for consumers but it hurts the return on capital."

Underscoring the dangers of regulatory change, Pacific Hydro's Chilean assets have taken a $210 million hit after tax reforms proposed by Chilean President Michelle Bachelet were approved by the country's congress.

The reforms include a rise in the base corporate tax rate from 20 per cent to 25 per cent by 2017 and an increase in the stamp tax payable on financing proceeds from 0.4 per cent to 0.8 per cent.

Chilean hydro generation has also been hurt by prolonged drought in that country.

Primarily as a result of the Pacific Hydro write-downs, IFM's mammoth Australian Infrastructure Fund is expected to decline in value by about 5 per cent for the September quarter. This is a major hit given infrastructure investments are supposed to be stable, defensive assets for the long term.

IFM will host an investor briefing, with a special focus on Pacific Hydro, on October 7.

The fund manager is undertaking a strategic review of Pacific Hydro called Project Primavera that is expected to be completed by the end of the year.

The RET was introduced with bipartisan support by the Howard government in 2001 and was expanded by the Labor government in 2009.

According to its 2013 report, Pacific Hydro has 18 operating assets, employs 294 people and generates annual revenues of $224 million.