Capital Dynamics targets £400m for UK-focused renewables fund

The new fund, the eighth in the Clean Energy Infrastructure series, marks a slight shift in strategy towards targeting electric-vehicle infrastructure and grid support.

Capital Dynamics has launched its eighth Clean Energy Infrastructure fund, which is targeting £400 million ($502.6 million; €446 million) in commitments.

According to documents from the Strathclyde Pension Fund, which last week approved a £40 million investment in the vehicle, the Clean Energy Infrastructure VIII fund reached a £114 million first close in April following investments from eight local authority pension schemes in the UK. It plans to raise a further £128 million before an additional close in Q3.

The documents stated that CEI VIII would target investments mainly in the UK, but that it would also look in “certain mature markets” in continental Europe. The fund already has exclusivity agreement on a 213MW pipeline of pre-construction onshore wind projects in Scotland. The sites will be subsidy-free but benefit from a 15-year corporate power-purchase agreement.

CEI VIII will invest in between 10 and 15 assets with an average ticket size of between £30 million and £50 million, targeting a net IRR of 10-12 percent.

The fund is seeking wind, solar and hydropower projects and plans to target sites in the construction, late-stage development and operational phases. However, a shift in Capital Dynamics’ traditional strategy will see the firm explore investments in electric-vehicle infrastructure and grid-support assets.

CEI VII, the previous fund in the series, was a US-focused vehicle that closed on $1.2 billion in April 2018. The close followed commitments from the California State Teachers’ Retirement System, Dutch pension manager APG and the Abu Dhabi Investment Authority.

Capital Dynamics declined to comment. Strathclyde could not be reached for additional comment.

Headquartered in Zug, Switzerland, and with offices around the world, Capital Dynamics has invested in renewable energy projects with a total capacity of 4.6GW. The CEI team, which began fundraising for the series in 2010, manages more than 100 sites in its current portfolio, as of July 2018