Fundraising

Macquarie eyes $400m for second cleantech fund of funds(2)

The fund’s official target is $600m, but its team is hoping to raise a more modest $400m in the current environment, according to a person familiar with the matter. Macquarie closed its first cleantech fund of funds on $200m in 2007.

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The Macquarie Funds Group is planning to raise $400 million for its second cleantech fund-of-funds, according to a person familiar with the matter.

The fund’s official target is $600 million, but its team is hoping to raise a more modest $400 million in current environment, the person said.

Carlsbad, California-based Rick Fratus is heading the fund, where the US team is based. The rest of the team is based in London.

The fund will seek to invest in funds focused on clean technologies such as solar, ethanol, wind, geothermal and biomass energy. It will have a mandate to invest in secondary transactions and to make co-investments.

Macquarie launched its first cleantech fund of funds in December 2006 and closed on $200 million the following year. That fund was invested in funds of funds such as Rockport Capital II, Hudson Clean Energy Partners and Carlyle/Riverstone Renewable Power Partners.  Its performance has been in excess of a 30 percent internal rate of return.

The Macquarie Funds Group was created last year to house Macquarie’s funds and funds-based structured product businesses under one roof. That division, which is separate from Macquarie Capital Funds, was created in June 2008 and is headed by Shemara Wikramanayake, formerly the head of Macquarie Capital Funds in North America.

In related news, Macquarie Capital recently launched a distressed debt fund. The fund, Macquarie Distressed Credit Investors, is based out of Macquarie's Chicago office, where Macquarie has a special situations team led by senior managing director Michael Silverton.

Two members of Silverton's team – James Placio and Christopher Eckstorm – are veterans of distressed debt private equity firm Black Diamond Capital Management.

In January 2006, Macquarie and Black Diamond jointly purchased Smart Carte, a concessionaire for baggage carts and strollers at airports across the United States, for an enterprise value of $270 million. Macquarie purchased all of Smarte Carte's equity, while Black Diamond invested in its debt.