Conquest eyes €500m as it launches Fund II – exclusive

The Europe-focused energy transition vehicle has shifted its length to 10 years from its predecessor's 20.

Dublin and Paris-based Conquest Group has launched its second energy transition fund seeking a minimum of €500 million.

The firm has launched Conquest Sustainable Infrastructure II, with the fund’s €300 million predecessor having been launched in 2016. The Europe-focused fund is set to target a broad range of assets in the energy transition space, with opportunities in storage, interconnectors, hydrogen, energy efficiency and the electrification of transport alongside renewable power.

The vehicle will be targeting returns of about 10-12 percent, Frederic Palanque, managing director and founder of Conquest, told Infrastructure Investor, and the firm has a proprietary pipeline of €240 million ready to deploy at first close. Palanque also said the second fund is likely to be the start of more frequent capital raisings.

“Due to the strong and proprietary dealflow we have as a result of our industrial partnerships, the idea of the strategy is to be able to do repeat compartments of €500 million under the same strategy on an ongoing and regular basis,” he outlined. “Every 18-24 months we will be raising [a new fund]. It is a good way to keep in touch with our clients, show we are very efficient and demonstrate ongoing deployment, which is key to the success.”

Palanque said the main difference between Conquest’s two funds will be the term length, with the second vehicle set to be a 10-year strategy, compared to the 20 years employed by its predecessor. Palanque said the longer-term structure excluded certain investors it had in mind and puts it on a more even footing with the rest of the market.

“We believe that out there are a lot of investors who do believe this 20-year structure makes sense,” he said. “However, if you try to disregard this aspect of synchronising the asset cashflow with the vehicle cashflow, what you realise is committing to terms of 20 or 30 years is pretty long. When you go to US or UK investors, a lot of people are happy to have this 10-year window. There is still out there a comparison of IRR and you cannot compare the IRR of 30 years and the IRR of 10 years. The market is really working on and focusing on KPIs which have been made for 10 years and it makes sense to be part of the market with the same kind of ratio.”

Conquest’s most recent investment was the acquisition of a 30MW solar park from developer European Energy. The deal marked the firm’s debut in the Nordics, having previously focused on Western Europe.