Exclusive: Carlyle renewables fund faces strong headwinds

An infrastructure vehicle managed by the US buyout firm alongside Riverstone, its long-time partner, was valued at 0.1x as at end December.

Carlyle/Riverstone Renew Energy Infrastructure I, a fund managed by US-based The Carlyle Group (Carlyle) and Riverstone Holdings (Riverstone), had seen its value nearly written off in full as at the end of last year, investment documents from one of the fund’s limited partners reveal.

The fund, which reached its final close in 2006 on $685 million, posted a return multiple of 0.1x as at 31 December 2014, according to a fund performance table by the California Public Employees' Retirement System (CalPERS). The same document shows the vehicle generating an interim net IRR of -33.6 percent as at the end of last year, while a performance review by the California State Teachers' Retirement System (CalSTRS) placed the fund’s IRR as at end March 2015 at -32.88 percent.

Carlyle and CalSTRS did not respond to a request for comment, while CalPERS declined to comment and Riverstone couldn’t be reached before press time.

Carlyle/Riverstone Renew Energy Infrastructure I, now fully deployed, has a mandate to invest in the wind, solar, geothermal, biomass, and biofuel sectors in the US, with typical equity cheques ranging between $20 million and $60 million. The exact composition of the fund’s portfolio is not public but known assets it has invested in include ethanol plants and a geothermal power station, in 2006 and 2008 respectively.

Aside from CalPERS and CalSTRS, limited partners in the fund include AP Fonden 2, British Columbia Investment Management Corporation, the New Mexico State Investment Council, the Rockefeller Brothers Fund, the Wells Fargo & Company Pension Plan, Macquarie Group, Fort Washington Capital Partners Group, Colfondos S.A. and the Overbrook Foundation, according to Infrastructure Investor Research & Analytics. 

Carlyle Infrastructure Partners, a $1.15 billion vehicle closed by the firm in 2007, posted an interim net IRR of 1.59 percent as at end March 2015, according to investment documents by the Maine Public Employees Retirement System.