US power producer Duke Energy has sold a minority stake in its renewables portfolio to an infrastructure fund owned by Canadian insurance giant Manulife Finance Corporation.
According to a statement released by Duke, John Hancock Investments, Manulife’s US capital management division, purchased a 49 percent stake in 37 operating wind, solar and battery storage assets in Duke’s renewables portfolio, as well as a 33 percent stake in 11 operating assets in the country. John Hancock’s interest represents 1.2GW of a 3GW portfolio, and its portion has an enterprise value worth approximately $1.25 billion, including existing project-level debt.
The second deal for the $2 billion John Hancock Infrastructure Fund comes after a final close last July drew commitments from 25 institutional investors. Nearly half of these commitments were from North American pension and insurance companies.
According to the statement, Duke – a power producer based in Charlotte, North Carolina – manages 51GW of generation capacity. The sale gives John Hancock exposure to assets that produce power that is purchased by utilities, electric cooperatives, municipalities, and commercial and industrial businesses.
The deal also gives John Hancock the right to purchase minority interests in certain solar and wind projects that Duke will develop, an arrangement the power producer called “a potential source of future growth capital”. Duke added that it would use the proceeds from the deal to “reduce future debt issuance needs.”
John Hancock did not respond to a request for comment.
JHIF is the first infrastructure fund Manulife has raised from third-party investors. Including assets that John Hancock has previously invested in – wind and solar farms, a natural gas plant, utilities and toll roads – the firm manages a $4 billion platform overseen by John Anderson, head of corporate finance at Manulife, and Recep Kendircioglu, a senior managing director at John Hancock.
Anderson previously told Infrastructure Investor in July that executives at the insurance company saw raising third-party capital as a way to participate in larger deals.
“In the past year, we have seen situations where we could have done a larger investment,” he said. “We thought, ‘if we had other investors with us, we could invest in larger sizes and an even larger amount of the transaction’.”
In August, John Hancock used JHIF capital to acquire a minority interest in Phoenix Tower International, a Florida-based telecommunications business also owned by private equity firm Blackstone’s Tactical Opportunities Group. John Hancock did not disclose the value of its investment or the stake it had acquired in PTI.