Fundraising

Japan’s Sparx launches $440m brownfield renewables fund

The Tokyo-based asset manager has secured $176m of commitments from a group of domestic investors for the new green vehicle.

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SPARX Group, through its asset trust and management arm, has raised 20 billion yen ($176 million; €150 million) for a new renewable energy investment fund targeting brownfield assets in Japan.

The Renewable Energy Brown Field Fund, has been supported by a group of domestic LPs including Ricoh Leasing Company, Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Finance and Leasing, Taiyo Life Insurance Company, the Tochigi Bank and others.

Sparx said it will continue fundraising activities with a target to grow the fund to 50 billion yen. With a 20-year life, the vehicle has a three-year investment period until the end of October 2020.

The renewables fund closed its first investment in early November, Sparx said without providing further details. It added that the fund will produce dividends from the start, as the vehicle is designed to invest only in operational power generating facilities, providing stable, long-term cashflows since the assets are backed by Japan’s feed-in tariff scheme.

“With little correlation to asset classes such as stocks and bonds, this fund can be considered a new alternative in the Japanese market,” said the fund manager.

In addition to the new brownfield-focused strategy, Sparx has been investing in greenfield renewables projects since October 2015. It established a greenfield renewables vehicle, which has invested in 24 power plants from their development stage – with a total power capacity of roughly 344MW. The portfolio was valued at 147.8 billion yen as of September 2017.

The firm also runs the Sparx Wide-Area Fund, which is an energy fund for government/civilian co-operative renewable energy projects, in partnership with the Tokyo Metropolitan government. The vehicle added its fifth asset, an 11 billion yen, 36.8MW solar scheme, this October to a portfolio of wind, biomass and solar assets.

The Japanese asset manager predominantly invests in stocks, with total assets under management of 1.18 trillion yen. Its Japanese renewable energy investment strategy managed about 158 billion yen as at the end of last month.