Union Investment has doubled the size of its debut infrastructure fund to €100 million at second closing, having previously announced a €50 million first close in October last year. The firm is aiming for a final amount of €300 million.
The €100 million so far raised by the German asset manager’s Luxembourg vehicle – the UniInstitutional Infrastructure SICAV-SIF Renewable Energy fund – means that a total of €350 million is available for investment allowing for debt financing.
The fund is focused on renewable energy, in particular onshore wind and solar photovoltaic farms. It has already agreed two wind deals in Germany and one in Ireland. In a statement, the firm said it was looking at deals in Germany, France and the UK “within the next few weeks”.
“The expansion of the portfolio is progressing as planned,” said Christoph Schumacher, a member of the management team at Union Investment Institutional Property, which is supporting the new infrastructure effort in a service provider role.
Union had previously said that the fund would invest around 70 percent of equity raised in wind farms in Germany, France and the UK, although it was also open to investing in Scandinavia and Poland “on a selective basis”.
Schumacher, who is spearheading the infrastructure push, was former head of indirect investments at Generali Deutschland Immobilien, the insurance group’s asset manager, for six years until he left in early 2011. In October last year, at the time of the first closing, he told Infrastructure Investor:
“We deliberately chose wind energy as the focus when designing the product due to the economies of scale. With geothermal power the economic benefits are still questionable relative to the high costs and risks incurred in test drillings, while the market for biogas plants is too small at present.”
Based in Frankfurt, Union Investment has more than €180 billion in assets under management and offers equity, fixed income, money market, alternative investment and quantitative structured products to private and institutional clients.