Starwood Energy sells 25% stake in Neptune(2)

A Northwestern Mutual affiliate has acquired Starwood’s holding in the Neptune Regional Transmission System.

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Starwood Energy has sold its 25 percent Class C stake in the Neptune Regional Transmission System to NM Neptune, an indirect wholly-owned subsidiary of Northwestern Mutual, the life insurer said in a statement without disclosing the price of the transaction.

In operation since 2007, the Neptune transmission system is a 65-mile high-voltage, direct-current underwater transmission cable connecting Sayreville, New Jersey with New York’s Long Island. Its 660 megawatts (MW) of capacity are fully contracted to the Long Island Power Authority (LIPA) under a 20-year agreement.

“Neptune represents a significant addition to our infrastructure equity platform that we formally launched in 2013 within Northwestern Mutual Capital, “ Ron Joelson, executive vice president and chief executive of Northwestern Mutual, said in the statement. “The combination of current yield from an asset with strategic importance to the power markets of the Northeastern United States is very attractive.” 

According to a spokesman for Northwestern Mutual, the infrastructure platform is a stand-alone platform that will be focusing mostly on power and energy, but also on transportation and other infrastructure sub-sectors.

In terms of a geographic focus, the platform will be more heavily weighted towards North America and less towards Europe, the UK and Australia.

Northwestern Mutual Capital, a wholly-owned subsidiary of the Northwestern Mutual Life Insurance Company, is the insurer’s private investment arm that manages over $33 billion of private assets for its clients across a portfolio of investment-grade private placements, mezzanine and equity co-investments in private equity transactions and private equity funds.

Starwood Energy Group, an affiliate of Connecticut-based private real estate investment firm Starwood Capital Group, specialises in energy infrastructure investments, with a focus on natural gas and renewable electricity generation as well as power transmission.

Through its general opportunity funds, Starwood Energy Infrastructure Fund I and II, and other affiliated investment vehicles, Starwood Energy Group manages total equity commitments in excess of $2 billion and has executed transactions totaling more than $4 billion in enterprise value since inception.