Armstrong debut fund exceeds target

Armstrong Asset Management, the Singapore-based clean energy-focused asset manager, has raised $164 million for its debut fund, exceeding its original $150 million target with commitments from European, North American and Asian investors, according to a statement.

The Armstrong Southeast Asia Clean Energy Fund secured commitments from 10 investors in all, including the International Finance Corporation (IFC) and the IFC’s Catalyst Fund; development institutions including the Netherlands Development Finance Company (FMO), PROPARCO from the Agence Française de Développement, GEEREF and DEG; Obviam, on behalf of the Swiss Investment Fund for Emerging Markets (SIFEM); asset manager Unigestion; an unnamed Asian institution; and the Armstrong management team.

Armstrong held a $65 million first close for the fund in August of last year, and most recently held a $130 million third close this August. The most recent closing involved new investors PROPARCO and Unigestion as well as increased support from existing investors of the fund, according to the statement.

“Our investors appreciate the fund’s geographic focus on Southeast Asia,” Andrew Affleck, Armstrong managing partner, said in the statement. “The region has been under-allocated in terms of clean energy private equity, but the success of the fundraising is also driven by the respective markets' evolving policy framework, obvious market demand and the growing pipeline of mature deal opportunities.”

Armstrong’s fund will focus on the development and construction of small-scale infrastructure projects in emerging Southeast Asia, and has already made two investments this year: a strategic cooperation with energy developer Symbior Solar Siam to develop and operate a 30-megawatt (MW) portfolio of six small-scale solar power plants in central and northeast Thailand, in which Armstrong will take a 60 percent stake; and a $30 million investment into a portfolio of solar and biogas power projects across Thailand, the Philippines and Indonesia run by Annex Power, a renewable energy group focused on Southeast Asia.

Affleck explained to Infrastructure Investor that these investments will receive capital in stages, as and when they hit certain milestones, but the capital allocated for the deals in their entirety constitutes about $40 million.

“Southeast Asia’s renewable energies and resource efficiency markets are supported by strong economic fundamentals, but still lack equity financing,” said Marie-Hélène Loison, PROPARCO deputy chief executive. “The Armstrong fund will thus play a strong catalytic role in these markets, and its commitment to positive social and environmental impact will improve awareness of these issues.”

The 10-year Armstrong Fund expects to make a total of between 10 to 15 investments, each ranging from $5 million to $25 million and typically generating up to 10MW from renewable energy sources in the solar, hydro, wind or biogas sectors. Investment size, however, can increase with co-investment.