German-based asset manager KGAL has launched its fourth renewable energy fund with a €500 million target.
KGAL, which has had a renewables division since 2003, said the Enhanced Sustainable Power Fund 4 (ESPF4) is an opportunity for institutional investors to “benefit from existing growth opportunities and the stability offered by renewable energies”.
The fund will invest in mature brownfield projects in the construction and development phase across Europe. It will focus on solar, wind, hydro and other renewable technologies.
KGAL cited a well-developed European market with a surging demand for electricity and a “binding political commitment” to develop clean energy as its key motives for targeting the region. Michael Ebner, KGAL’s head of infrastructure, argued that while the wide interest in renewable assets had “squeezed” brownfield investment returns, ESPF4’s strategy was designed to mitigate this risk.
“The pace of change in the renewable energy market requires a flexible, regionally diversified investment strategy optimised to account for investment cycles,” he said in a statement. “The premise of ESPF4 takes this development into account and offers investors opportunity-based participation in the growth in renewable energies.”
Based near Munich, KGAL has been an active asset and investment manager since 1968. At the end of last year, its assets under management stood at €21.7 billion. Renewables accounted for €2.3 billion of the total, including €1.3 billion invested in 63 solar projects and €1 billion invested in 56 wind farms.
Its infrastructure division has more than 50 staff.