AXA wind deal is fifth for Fund III

AXA Private Equity (AXA PE), which recently raised €1.75 billion for infrastructure investing, has acquired two wind farms from London-based HgCapital for an undisclosed amount, the firm announced today. 

The deal is the fifth funded by AXA Infrastructure Fund III and was done via portfolio company Kallista. Thanks to the 23 megawatts (MW) generated by the two wind farms, Kallista is now France’s third-largest wind producer with a total capacity of 321MW, AXA PE said. The two wind farms are located in Picardie and are close to existing Kallista wind farms. 

AXA PE bought Kallista in 2009 from defunct infrastructure investor Babcock & Brown. Since then, it has almost doubled Kallista’s wind power capacity, AXA PE said. The firm’s infrastructure team has been active in the renewables space and, following this acquisition, expects its generating capacity to exceed 700MW. 

Last month, AXA PE closed its third infrastructure fund, raising €1.45 billion plus an extra €300 million specifically for co-investment. 

Head of infrastructure Mathias Burghardt credited co-investment as “instrumental” in Fund III’s fundraising. In fact, of the €700 million invested by Fund III in its previous four deals, only half of the equity was directly committed by the main fund thanks to its co-investment strategy. 

Shortly after Fund III closed, AXA PE announced its much-vaunted spin-out from insurance group AXA in a deal valued at €510 million, including debt. 

The spin-out will see AXA Group remain a shareholder in the business with a 27 percent stake, and retain commitments to AXA PE’s funds totalling €4.8 billion between 2014 and 2018. The majority of AXA PE (40 percent) will be owned by its employees, with the lion’s share to be owned by top management and the remainder to be opened to AXA PE’s 298 employees. 

The remaining 33 percent of AXA PE is now in the hands of external investors, including French bank Credit Mutuel and at least two French family offices, sources previously said. 

AXA Investment Management, the AXA Group subsidiary to which the private equity firm essentially belonged, will book €488 million in proceeds from the sale. This will be divided into an up-front payment of about €348 million and deferred consideration of up to €140 million.  

The spin-out is due to officially close later this year.