NextEnergy Capital (NEC) has reached a €150 million first close for its debut renewables private equity fund, after it first planned to list the Italian-focused vehicle on the London Stock Exchange last year.
The London-based renewable manager said it will begin investing the NextPowerII fund in Italy's fragmented solar market, following an initial commitment mainly from Prudential Assurance Company. NEC is still raising more capital for the fund and said it is pursuing a portfolio of around €1 billion in investment value.
NEC first announced it would launch an Italy-focused listed solar fund last June, targeting €500 million, but Bonte-Friedheim cited market volatility as the reason the fund never got off the ground.
Diego Biasi, chief executive of Quercus Investment Partners, a company also investing in the Italian solar market, told Low Carbon Energy Investor last October that a “private fund is more appropriate than a listed fund” for renewable energy investing. “What the listed investors promise is a growth story,” Biasi said. “We are designed for people that are not looking for a growth story, but for long-running yield.”
NEC said its strategy is to consolidate the Italian solar market, the second-largest in the EU and the fifth-largest in the world. Despite its size, the top 10 players represent 7 percent of managed assets in the market. The majority of the solar assets were constructed between 2010 and 2012.
“We are delighted with a €150 million first close of our new fund, established to pursue the attractive long-term opportunity in Italian solar,” NEC's founder and chief executive Michael Bonte-Freidheim said in a statement. “We have a strong acquisition pipeline and expect to announce our first investment shortly.”
In September, the NextEnergy Solar Fund (NESF), which focuses on UK solar assets, tapped the market for a fourth equity raise. And in April, NESF expanded its portfolio when it agreed to purchase five UK solar farms for £98 million ($137 million; €122 million).