SUSI closes second energy efficiency fund on €289m

Although the coronavirus slowed fundraising momentum, it didn’t prevent the firm from expanding its investor base, with roughly half of LPs committing to SEEF II being new to the firm.

SUSI Partners has held a final close on its second energy efficiency debt fund on €289 million, just shy of the €300 million target it had set before the coronavirus outbreak.

Approximately half of the institutional investors committing to SUSI Energy Efficiency Fund II are new to the Swiss firm. SUSI, which specialises in the clean energy infrastructure sector, said in a statement that the institutions comprised pensions, insurance companies and foundations from Switzerland, Germany, the Netherlands, Sweden, and for the first time, Denmark.

“It’s a natural evolution,” Marco van Daele, the firm’s co-chief executive and chief investment officer told Infrastructure Investor, referring to SUSI’s expanded investor base. “I think it’s also driven by SUSI having reached a level of brand recognition and recognition in general because of its track record for being one of the very few, if not the only, holistic clean energy investors, with 10 years’ experience investing across the value chain in the energy transition.”

Asked if the pandemic had affected the firm’s fundraising activity, van Daele said: “Clearly, things haven’t become much easier operationally. Working from home offices, working digitally, the consensus is it’s worked better than maybe we would have expected. But it’s certainly not the same thing, especially when it comes to the more relationship-focused side of things.”

He added, however, that the firm has seen increased interest from investors in the clean energy space. “While data is scarce still, what we see on the ground – and it’s certainly true of our portfolio across all funds – is that sustainable infrastructure specifically has performed very well [in light of] the external shocks that we’ve seen in the economy,” he said

SEEF II, which has deployed roughly €100 million to date, has had 45 percent more commitments than its predecessor, which closed on €200 million in 2014.

SUSI’s successful close on SEEF II and its ability to attract new LPs would suggest that awareness around energy efficiency among institutional investors is growing. However, our May cover story revealed that energy efficiency was one of the most overlooked areas in the fight against climate change.

“We found the exact same thing five years ago,” van Daele said, noting that energy efficiency is one of the most important, if not the most important, levers in making the energy transition possible.

“I think that what people have struggled a lot with – both from the LP side but also on the manager side – is to actually make it happen; to find the right structure and to find the right business model to channel institutional capital at scale into energy efficiency,” he said. “That is something that is very tricky because of the nature of these investments, which tend to be small, quite fragmented and to have varying degrees of equity structuring capability.”

Van Daele said SUSI spent five years devising the right structure and the right business model to be able to invest in this sub-sector.

He added that the firm has executed more than 40 deals across its two energy efficiency funds.

The SEEF II portfolio includes light-as-a-service projects in Germany, Poland and Italy; energy upgrades in public buildings in Slovenia; street lighting retrofits in Spain; and a smart-metering-as-a-service deal in partnership with Discovergy, a German provider of smart meter solutions. The firm also continues its partnership, which it established under SEEF I, with Signify (formerly Philips Lighting), which implements LaaS projects across various countries in Europe.

According to the firm, the investments it has made across its existing energy efficiency platform are estimated to result in carbon savings of approximately 4 million tonnes over the lifetime of the projects.