Excelsior Energy plans $750m Fund II launch in Q3 – exclusive

The Minnesota-based manager is close to fully committing its debut effort, which closed on $504m in January 2021.

Minnesota-based Excelsior Energy Capital is gearing up to launch its second North America-focused renewable energy fund in Q3, sources have told Infrastructure Investor.

A $750 million target is envisaged, although it’s understood that no hard-cap has yet been set. The Excelsior Renewable Energy Fund II would continue the strategy of its predecessor, targeting middle-market wind and solar projects across the US and Canada.

Fund I, which closed on $504 million in January 2021, slightly above its $500 million target, is believed to now be about 80 percent either committed or invested, having deployed into a 250MW commercial and industrial solar portfolio across North America, a distributed energy platform in California and a 205MW wind site in Washington. It generally targets assets close to beginning construction, with one source saying this has so far generated returns in the mid-teens.

Excelsior declined to comment on the fundraising.

The firm was founded in August 2017 by a group of former managing directors at the now Brookfield-owned renewables developer and operator TerraForm Power. It received support in its foundation by the Development Bank of Japan, which also acted as an anchor investor on its first fund, as well as helping to bring in other institutional investors from Japan. Other capital was raised in the US, Europe and Middle East.

The DBJ says on its website that its partnership with Excelsior will enable it to “keep in touch with the latest industry trends and expertise in the US power market”, as well as “to further contribute to the development of Japan’s energy industry and the realisation of a low-carbon economy”.