Fundraising

Aquila heads to public markets for new €300m renewables fund

While the German firm has invested in renewables through private funds, it’s seeking to attract a ‘new and additional investor audience’ through its new listed vehicle.

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German renewables manager Aquila Capital has launched a new fund on the London Stock Exchange, seeking an initial €300 million for a new European renewables strategy.

The fund, which could raise up to €400 million from the IPO, will be looking to acquire largely operational wind, solar and hydropower projects in continental Europe and the Republic of Ireland, with a targeted net IRR of between 6 and 7.5 percent.

Aquila has typically targeted renewables assets through the private markets route, having launched a number of wind and solar funds, in addition to a European hydropower-specific vehicle. However, it is eyeing a “new and additional investor audience” for the Aquila European Renewables Income Fund, according to Lars Meissinger, head of sales management and business development at Aquila.

“The private funds all have tenors of 10 and 20 years and are therefore catering to an investor audience which is able to accept that illiquidity,” he told Infrastructure Investor. “Using the liquidity transformation of unitising the portfolio into shares is allowing us to speak to another audience.”

The Hamburg-based manager says it has already identified a pipeline of projects in Iberia and Scandinavia, with the fund deliberately avoiding the UK to offer investors a different option.

“Our current peers in the sector are investing in the UK and we’ve seen how well the sector is doing,” added Christine Brockwell, senior investment manager at Aquila. “What we’re looking to do is offer a diversification from what their current holdings are to a more pan-European focus. It’s for investors that like the sector and want to invest in wider Europe. If we were to invest in the UK it wouldn’t be a diversifying investment opportunity for them.”

Brockwell, who joined Aquila in February 2018 from Global Capital Finance, will lead the new fund, along with Ian Nolan, who will join as chairman of the fund. Both previously worked at the UK’s Green Investment Bank. Brockwell spent just over a year as head of offshore wind between 2013 and 2014, while Nolan served as the bank’s chief investment officer at the time.