Quercus Investment Partners is planning the launch of an electric vehicle charging infrastructure fund, targeting about £500 million ($651.4 million; €566.8 million) in commitments, Asif Rafique, a managing director at the firm told Infrastructure Investor.
The UK- and Italy-based fund manager said the move represents “a natural evolution” from its previous investments in wind and solar assets, with the fund set to be Quercus’s sixth since its formation in 2010.
The fund will target investments across the electric vehicle infrastructure space such as charging forecourts, grid infrastructure and energy storage solutions, eyeing low double-digit returns. Rafique, who recently joined Quercus as a managing director from Switzerland-based SUSI, where he led the launch of the world’s first energy storage fund, will lead the effort.
“The fund will help evolve the ecosystem of the whole electric vehicle space,” he said. Rafique added that it will largely target investments in the UK, with other geographies considered in a “second phase”.
Rafique explained that revenues for the fund will primarily come from electricity sales to customers, while stored energy can be sold to the grid.
“Most operators are moving away from contracted subscription-based cash flows,” he added. Rafique acknowledged that the key risk faced by the fund is utilisation, with the “classic infrastructure definition difficult to extend” to the new fund.
“Most people understand the stage of the sector remains early along with its challenges,” he said. “LPs are aware of that, so a different pool of capital is looking at this fund.”
The fund has no connection to the Charging Infrastructure Investment Fund currently being tendered for by the UK government. One or several managers will be appointed by the government in either November or December and £200 million of public money will at least be matched by the private sector.
Quercus earlier this week announced former UK energy minister Lord Barker as its new chairman following the retirement of Vito Gamberale. The firm earlier this year confirmed it had dropped plans for a 600MW solar plant investment in Iran following the re-imposition of sanctions.