German bank eyes insurers with maiden wind fund

LBBW is targeting €100m for the vehicle, the first of in a series of infrastructure-related offerings.

Germany-based Landesbank Baden-Württemberg has launched its first infrastructure fund, eyeing €100 million for onshore wind investments in Germany and France.

The bank is primarily targeting commitments from German insurance companies for Wind 1, although this could also be expanded to French and Italian groups. The fund will be managed by Luxembourg-based Hansainvest.

The 20-year vehicle will target returns of 5.5 percent and invest in brownfield assets already built or under construction. LBBW plans investments from the fund totalling €300 million, including leverage.

“We wanted to offer an equity product in the renewable energy sector,” Damian Wosnitzka, product specialist at LBBW, told Infrastructure Investor. “The technology of wind in our opinion is far better than solar.”

He said the fund will have between three and four closings, and LBBW added that the capital raised for each closing will be invested within a maximum of 180 days. The group said it “knows of no other funds with a comparable structural design”.

The fund’s pipeline comes from an agreement with Encavis Asset Management, a subsidiary of the German renewable energy developer Encavis, formed by a merger between Capital Stage and Chorus Clean Energy last year. Encavis will present LBBW and Hansainvest with exclusive investment propositions and the fund can then decide if it wants to invest.

LBBW confirmed Wind 1 is its first infrastructure fund as part of a plan for more offerings, although it was unsure if these will be expanded by sector.

“Right now there’s no decision made, but we have a global investment committee where we discuss upcoming projects and so this is always driven by our client base,” Wosnitzka added.