The Pipeline: Excelsior’s $502m first close, Cathay Life’s infra sale, German offshore attracts titans

Excelsior hits $502 million first close, Cathay Life preps sale of major infra funds and Nordic funds team up with Allianz on German offshore wind. Welcome to The Pipeline, the start-the-week briefing for our valued subscribers only.

First look

Excelsior races to $502m first close
US renewable energy investor Excelsior Energy Capital has reached a $502 million first close for its Renewable Energy Investment Fund II.

Launched towards the end of last year with a target of $750 million, the fund aims to invest in mid-market wind, solar and storage projects in North America, as well as energy transition infrastructure projects beyond core renewables. It saw its first close led by five existing LPs in the firm’s first fund Excelsior Renewable Energy Investment Fund I and also drew commitments from two new LPs.

With a pipeline of over 6.5GW of solar, solar-plus-storage and standalone battery storage projects already lined up, the firm expects to reach a final close for Fund II this year.

Fund I, which is almost fully committed, reached a $504 million final close in December 2020 after launching in January the same year. Such speedy processes are the envy of 2023.

Infranity’s infra debt follow-up
Paris-based asset manager Infranity has launched a €370 million infrastructure debt fund alongside its parent company Generali Group and an unnamed international institutional investor.

The fund is expected to invest in senior investment grade debt in Europe’s renewable energy and digital infrastructure sectors. It follows on from Infranity having launched GGI Senior Infrastructure Debt Fund II in July 2021 with a target of €2 billion. The latter reached a €1.22 billion first close in November. The first iteration of the fund, GGI Senior Infrastructure Debt Fund, launched in 2019, reached a €2.01 billion final close in June 2021 and is now fully deployed.

“We are extremely focused on keeping up the high levels of illiquidity premium that we have been able to source in a dynamic market that presents dozens of deals to us every month,” Infranity managing partner Philippe Benaroya said.

Seems the financing turmoil is only affecting some, then.

Rakiza fund hits $1bn
Oman Infrastructure Investment Management and Equitix’s co-managed infrastructure fund, Rakiza, has reached a $1 billion final close.

The vehicle was launched in 2020 and received a significant boost last year after securing a $300 million commitment from Saudi Arabia’s Public Investment Fund.

The fund, which primarily invests in PPP projects in Oman and Saudi Arabia, is off to a healthy start, having seen 25 percent of capital deployed across three projects: a 30 percent stake in an Oman-based telecom tower portfolio; a 31 percent stake in a gateway container terminal in the Port of Sohar; and – in surely a new infrastructure sector – a majority stake in Khazaen Fruit and Vegetable Central Market in Oman.

Also targeting renewables, power and water, social infrastructure, telecommunications and transport and logistics, the fund has a strong pipeline, with “several” more investments nearing financial close, according to a statement.

Perhaps unsurprisingly, a second fund is now also on the cards, the parties said.

Eurazeo nears €500m target for transition fund
European manager Eurazeo has held an interim close for its Eurazeo Transition Infrastructure Fund, bringing the total raised to “circa €420 million”, the firm said. It held a first close on €210 million in November last year and is targeting €500 million.

Affiliate title New Private Markets reported that the latest fundraising round brings it to 80 percent of its target and “includes global institutional investors and capital from both dedicated infrastructure allocations and SFDR Article 9 funds”, according to a statement.

The fund’s strategy is to invest in 10 to 12 companies with a ticket size of €50 million to €150 million. It made its fourth investment in February, investing in European data centre group Etix Everywhere. This adds to previous rooftop solar, recycling and EV charging infrastructure deals.


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LP watch

Cathay wants to breathe new Life with infra sale

Another large LP portfolio is set to hit the secondaries market as activity continues its gradual ramp-up from the slowdown in the latter half of last year, affiliate title Buyouts reported.

Cathay Life Insurance is prepping a portfolio of mostly infrastructure fund stakes that could be sized at more than $1 billion, two sources told Buyouts. The process is still in its early days and it’s not clear when the sale will go live.

The Taiwanese company, with about $232.3 billion in assets, is said to be working with placement agent Campbell Lutyens on the offering. It is unclear which of its infra fund investments are up for sale, but the insurer’s portfolio comprises commitments to several vintages of the asset class’s biggest hitters such as Macquarie Asset Management, Brookfield Asset Management, Global Infrastructure Partners and KKR.


Nordic funds dive into German seas
German utility EnBW is selling a 49.9 percent stake in the 960MW subsidy-free German offshore wind farm He Dreiht.

The stake is being bought by a consortium consisting of Norges Bank Investment Management, which manages Norway’s sovereign wealth fund, Danish asset manager AIP Management and Germany’s Allianz Capital Partners.

The stake is shared equally among the three parties. Norges Bank stated that it will pay around €430 million for its 16.6 percent ownership interest, which values the deal at nearly €1.3 billion. No external debt financing is involved, Norges Bank added.

He Dreiht is located in the German North Sea and will have 64 Vestas 15MW turbines. Construction will start in 2024, and the wind farm should be operational by the end of 2025. The project is based on rights acquired back in 2017 and 335MW of corporate PPA agreements have already been signed, according to EnBW, which will develop the project.

The direct institutional investment into He Dreiht is the latest in the European market, following APG looking at 4GW of opportunities in the Netherlands at the start of this year with SSE. A new wave of interest?

Argo stakes claim on Smoky Mountain
Argo Infrastructure Partners is set to partner with Brookfield Asset Management, having acquired a 50 percent stake in the latter’s US operating hydroelectric portfolio Smoky Mountain Holdings.

Brookfield will hold the remaining 50 percent stake in the 378MW portfolio spanning four hydroelectric generating and storage facilities in Tennessee and North Carolina. Included in the system is an 86-mile transmission line allowing the dispatch of electricity via multiple market interconnections in the PJM, TVA or Duke Carolinas power grids.

The investment marks the sixth and final investment for Argo’s Series 3 core fund. Argo Infrastructure Partners III, launched in January 2020, doubled its fund target with a $2 billion final close in April 2021.

Announcing the investment, Argo principal Brice Soucy said the portfolio is “one of the largest scale renewable and hydroelectric assets in the Tennessee Valley region”. Brookfield first invested in the portfolio in 2012, in a deal worth $600 million.

Today’s letter was prepared by Zak Bentley. Tharshini Ashokan and Anne-Louise Stranne Petersen also contributed.