Prime Capital targets Nordic wind power with new fund

Frankfurt-based asset manager has already secured three seed investments in Norway and Sweden totalling more than 600MW of capacity.

Prime Capital aims to raise more than €500 million for its Prime Green Energy Infrastructure Fund, which will invest in large-scale wind projects in the Nordic countries, with a view to holding a final close in 2020.

The Frankfurt-based asset manager said it had already secured three seed projects in Norway and Sweden with a combined generating capacity of more than 600MW.

It said it was is in “advanced discussions” with unnamed seed investors for its first closing. Prime Capital’s head of infrastructure, Mathias Bimberg, told Infrastructure Investor that the investors were from the Nordics, Germany, France and Switzerland. He added that the company had been “surprised by the substantial interest from Asian investors”.

Bimberg said that Prime Capital expected a first close to take place at the end of Q3 and for the fund to raise approximately €300 million.

The firm said it was taking an innovative approach by investing in projects at a late stage of development rather than during their operational phase.

“We believe that the strategy to acquire attractive late-stage development assets as such is not new to the market,” Bimberg said. “However, an asset manager, who takes over responsibility to optimise and commercialise the assets, has rarely been seen in the market so far. Over the past decade, most asset managers have simply focused on acquiring turnkey projects, something we would describe as ‘low-hanging fruit’.”

According to the statement, “commercialisation” refers to the process of optimising the layouts, contracts and financial structures of projects that have already been granted permission.

The fund, which has a term of eight years with the option of two one-year extensions, will target a net return of more than 8 percent. Prime Capital said that it expected the fund to make between seven and 12 investments.

Although it has acquired wind, solar and hydro assets across Europe totaling around 600MW in generating capacity and worth roughly €900 million, it has done so through accounts it manages on behalf of two insurance companies and three pension funds, all in Germany.

Founded in 2006, Prime Capital initially focused on hedge funds, credit and real estate strategies. It began developing its infrastructure and asset management business in 2010.
“From the start, Prime Capital focused on the ‘renewable energy’ segment because it delivers tangible environmental and socio-economic benefits,” the firm explains on its website.

Its first related product was Prime Renewables, a corporate structure launched in 2012. “The management [team] built up a pan-European portfolio of renewable energy assets domiciled in Sweden, France, Italy, Germany and the UK,” Bimberg told Infrastructure Investor. Prime Capital successfully divested that portfolio in 2016.

According to the firm’s website, its infrastructure team comprises 11 investment professionals with a track record across all European jurisdictions and across onshore and offshore wind, hydro and solar PV.