Stonepeak expected to close renewables fund on $2bn hard-cap in early 2021

The US firm expects renewables to be a big part of its business in coming years, part of the reason it has also hired William Demas from CIP.

Stonepeak Infrastructure Partners is on track to reach the $1.25 billion target for its debut renewable energy fund in the coming weeks and to close near the vehicle’s $2 billion hard-cap early next year, a source told Infrastructure Investor.

The New York-based firm expects renewables to be a big part of its business in the coming years, which is why it hired William Demas as managing director.

Demas, who will be based in New York, joined Stonepeak this month from Copenhagen Infrastructure Partners, where he was associate partner for the last three years. Before that, he had spent more than six years at Macquarie Capital focusing on the power, utilities  and renewables sectors.

Hajir Naghdy and Michael Allison, both senior managing directors at Stonepeak and both ex-Macquarie Capital executives, are leading the Stonepeak Global Renewables Fund. The vehicle has so far made four investments in solar and wind assets in the US, Taiwan and Japan. The renewables-only fund was launched last year to capture steady cashflow from assets that have seen returns compress in an increasingly competitive market. It is thought to be targeting 12 percent gross returns.

The source told Infrastructure Investor that Stonepeak is unlikely to acquire renewables assets through its flagship Stonepeak Infrastructure Fund IV, which as of August, had raised $8 billion out of a $12 billion target. That fund is targeting 12 percent net returns and charging a 1.5 percent management fee and 20 percent carry on an 8 percent hurdle, according to documents published this year by the Employees’ Retirement System of Rhode Island.

With renewables off the table, Stonepeak’s first investment from Fund IV, which was announced last week, was an $8.1 billion acquisition of US communications company Astound Broadband from TPG Capital. Stonepeak and Patriot Media, which will manage Astound’s portfolio, committed around $3.6 billion in equity and are assuming $4.5 billion in debt.

In October, the firm informed investors that one of its founders, Trent Vichie, plans to retire by the end of next March.

Stonepeak declined to comment for this story.