Harbert power fund closes at $485m

The North American independent power asset investment fund closes with equity commitments totaling $485m.

Harbert Management Corporation (HMC) has announced the final close of its Harbert Power Fund V (HPF V) with equity commitments of $485 million.

The fund was launched with a goal of $500 million and saw a first close in December 2012 at $246.65 million, according to Bison Market Insights.

Investment partners include pension funds, insurance companies, family offices, foundations and HMC partners, according to an August 2013 release from the company which names California Public Employees Retirement System (CalPERS), the largest pension fund in the US, as one of the fund's investors.

HPF V invests in independent (non-utility) power assets in North America, and, according to a February 5 release, includes “significant US and international investors,” representing the largest discretionary HMC power fund to date.

“We are very pleased and grateful for the response from both previous fund investors and new investors to HPF V. The confidence they have shown is attributable to our long-term, excellent track record, our proven investment team which we have continued to strengthen, and the opportunity for good, relatively low-risk equity returns possible with our power investment strategy,” said Harbert Power CEO Patrick Molony. “With the completion of this fundraise we are in excellent position to build on the success of our previous power funds.”

HMC is currently investing approximately $1.4 billion of equity in independent power assets through HPF V and the separate $900 million Gulf Pacific Power Fund, which focuses on investments larger than those targeted by HPF V.

In November 2014, HMC announced that HPF V had acquired a 5 percent interest in the Astoria Energy I facility, a dual-fuel, 550-megawatt combined cycle power plant located in Queens, New York, from Lavalin Group.

HPF III, another HMC fund, owns interests in Astoria Energy I and its sister facility, Astoria Energy II, according to an HMC spokesman.  

To date, HPF V has invested approximately $160 million in power assets with predictable cash flows with an opportunity for attractive returns with low market risk, according to the February 5 release.

Founded in 1993, HMC is a privately-owned firm that currently manages over $4 billion in alternative assets, with $1.8 billion of that aimed at energy assets.