New Energy targets up to $400m for second clean energy credit fund

The vehicle will deploy $15m-$40m per transaction.

New Energy Capital Partners is back in market with its second debt fund, hardly 18 months after its debut vehicle held a final close, according to Securities and Exchange Commission filings.

The Hanover, New Hampshire-based firm is targeting up to $400 million for New Energy Capital Infrastructure Credit Fund II. The debut fund, which wrapped up fundraising in April 2017, hit its $325 million hard-cap, surpassing a $250 million goal.

The strategy targets investments in clean energy projects, including solar, wind, and energy storage, according to a statement announcing Fund I’s final closing.

The fund series also invests up and down the capital structure, from senior debt through preferred equity. Specifically, the firm targets projects and companies that need $15 million-$150 million in financing and will put forward a total of $5 million-$40 million per deal, according to the firm’s SEC disclosure. The same document shows New Energy charges management fees of between 0.9 percent and 2.5 percent.

New Energy could not be reached for comment by press time.

Renewable energy credit investing has garnered few dedicated funds, with only three other such vehicles currently in market seeking a combined $1.38 billion, according to Infrastructure Investor data.

Those vehicles are Climate Fund Managers’ $530 million Climate Investor One, Aditya Birla Private Equity Advisors’ $100 million Global Clean Energy Fund and NN Investment Partners’ $750 million NN-FMO Emerging Markets Loan Fund.

Some $4.51 billion has been collected for renewable energy-focused funds, both debt and equity, in the first six months of the year, Infrastructure Investor research shows. The vast majority of that capital, though, is attributable to the $4.1 billion fund managed by Copenhagen Infrastructure Partners, which closed in March.

When taking into account funds that invest in an array of energy projects that include renewables, an additional $3.2 billion was raised, Infrastructure Investor data show.

Clean energy-focused funds locked down 9 percent of the total capital ($5.05 billion) raised in 2017. It was the largest amount ever raised for those vehicles. Previously, the strategy had yet to surpass $4 billion. The largest single fund raised since at least 2013 was $1.65 billion, with the CIP fund more than doubling that figure.

Energy credit itself has garnered large funds in recent years, including The Carlyle Group’s $2.8 billion Carlyle Energy Mezzanine Opportunities Fund II, which closed in November 2016, while GSO Capital Partners is targeting $5 billion for GSO Energy Select Opportunities Fund II, according to sister publication Private Debt Investor.