InfraRed aims ‘to build off TRIG success’ in the US

The manager is planning a greater allocation towards US renewables, focusing on an income-oriented strategy, following its acquisition by Sun Life.

InfraRed Capital Partners is planning a significant expansion into US renewables as it looks to leverage off its new parent company Sun Life, the financial services company headquartered in Toronto.

The firm, which is one of the earlier infrastructure fund managers operating out of London, will look to make North America a “disproportionately” bigger part of both its existing and future funds, Jack Paris, its head of Americas hired last year from Citigroup, told Infrastructure Investor. He added that the focus will be on renewables, where it would look to replicate the model and success of The Renewables Infrastructure Group, a London-listed yieldco advised by InfraRed and launched in 2013. It has since gone on to acquire projects with a net generation capacity of over 2GW.

“We’re looking for onshore wind, solar and storage. Over time, we will look at offshore wind as well, but it’s a little further behind,” Paris said. “Our strategy is an income-oriented strategy, so we need to look at more mature assets. We’re really looking to build off the success we had in Europe with TRIG and implement the same strategy here in the US. It’s acquiring operating assets that introduce cash flow income and as a buy-and-hold strategy through an open-ended structure.”

Paris declined to comment on fundraising efforts, but Sun Life, upon its agreement of an 80 percent acquisition of InfraRed in 2020, said it will co-invest $400 million to “support the launch of new InfraRed investment solutions”. Werner von Guionneau, InfraRed’s chief executive, said in a statement at the time that it would use the investment to drive growth in the US renewables market in particular.

Paris told Infrastructure Investor the group is close to completing its first deal – a solar and storage asset – through the strategy, and that it plans to add two to three further assets by the end of the summer.

“We’re trying to develop a North American-dedicated product and even within our existing funds, the North American market will be disproportionately a bigger part, for sure,” he added.

The strategy will be aimed primarily at US LPs, Paris explained, although he said there could also be involvement from European and Asian investors viewing returns in the US renewables market as more attractive than in Europe.

“The market is a little more nascent than in Europe in terms of the desire to own something ESG-centric, but it has come a long way in the last couple of years,” said Paris. “We see the same trends we saw in Europe playing out in North America.”