Paul Buckley, founder and managing partner at placement agent First Avenue, told us in late May that private infrastructure investors were poised to benefit from the demise of the much-vaunted yieldco phenomenon. If fundraising activity is anything to go by, Buckley seems to be on the money.
In mid-June, NextEnergy Capital reached a €150 million first close for its debut renewables private equity fund – after initially planning to list the Italian-focused vehicle on the London Stock Exchange last year. The manager says it will begin deploying the money, which so far largely comes from insurer Prudential, in Italy’s fragmented solar market. It is aiming for a portfolio of around €1 billion in investment value.
Another manager that is betting on renewables is Quercus Assets Selection, which, at press time, was nearing a first close on three renewable energy funds targeting Italy and Europe, according to people with knowledge of the firm. With a combined target of €500 million, the funds are expected to reach a final close by the first half of 2017.
European firm Luxcara also bumped up the size of its third renewable energy fund to €170 million after holding a fifth close. The vehicle, open only to institutional investors and backed by a group of German pension funds and insurance companies, has a 190MW portfolio spanning solar and offshore wind in Germany, the UK and Norway.
The month was also rich in milestones on the listed infrastructure front. Top of the list was London-listed 3i Infrastructure, which glided past its initial £350 million ($515 million; €456 million) target to garner a total of £385 million amid strong investor demand. A spokesman called it “the largest fundraise in the UK listed infrastructure space since 3i Infrastructure’s IPO in 2007”. The firm plans to use about £230 million to pay for its recent investments in Wireless Infrastructure Group and TCR, due to close in June and August respectively. The rest of the proceeds will be used to help fund the firm’s residual deal pipeline, which the team values at £400 million.
Debt-focused Sequoia collected £175 million for its Economic Infrastructure Income Fund through a C-share placement on the London Stock Exchange. The vehicle invests largely in subordinated infrastructure debt, although it can also cherry-pick senior debt positions. In May, Sequoia said its portfolio comprised 17 infrastructure bonds and 19 private debt investments with a total value of £287 million.
Two unusual ventures also made headlines. First was Partners Group, which launched a private markets fund tailored to the UK defined contributions pensions industry, seeded with $20 million of its own money. The vehicle will provide investors with access to private equity, private debt, private infrastructure and private real estate, while offering daily liquidity and pricing.
And finally, Bernhard Capital Partners Management closed its inaugural fund on its $750 million target. Based in Louisiana, the private equity firm seeks deals in the energy services industry, including in areas like midstream, downstream and power.