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Ares sells 322MW gas plant to undisclosed investors

Ares Management’s subsidiary has raised $621.8m for its fifth energy fund and sold the recently completed Pio Pico gas facility in California.

A subsidiary of Ares Management has sold a 322MW gas-fired power plant in California to an undisclosed institutional investor advised by JPMorgan Asset Management.

The institutional investors purchased the Pio Pico Energy Center in Otay Mesa, California from a fund managed by Los Angeles-based Ares EIF Group, a fund manager owned by Ares. The investors were not named, but, according to a statement, are also invested in the independent power platform Southwest Generation.

The Pio Pico facility recently began operation in November and has a 25-year power purchase and tolling agreement with San Diego Gas & Electric.

The terms of transaction were not announced, and the deal is still subject to regulatory approval.
“Pio Pico is a unique asset providing long-term cashflow visibility that complements our growing portfolio of long-term contracted thermal and renewable generation assets,” said Matt LeBlanc, chief investment officer for OECD Infrastructure at JP Morgan.

Ares EIF began in 2002 as Energy Investors Funds and has completed greenfield generation and transmission projects worth almost $10 billion and 8.2GW of capacity. The group was purchased by Ares, an asset manager with around $97 billion in assets under management, in 2015. It is currently raising its fifth fund, Ares Energy Investors Fund V, and has $621.8 million in commitments. It began fundraising in 2015 with a $3 billion target.

In June 2015, Ares, along with project developer Genesis Power, sold the 755MW Keys Energy Centre to PSEG Power’s wholly-owned subsidiary PSEG Fossil.