Victory Hill Capital Advisors, a London-based firm focused on the energy transition, is seeking to raise $400 million for a growth equity fund providing capital to renewable energy developers.
The fund has a hard-cap of $600 million and plans to hold a first close on $200 million in the second quarter, Anthony Catachanas, the firm’s founding partner and chief executive, told Infrastructure Investor.
“We already have some anchor commitments,” Catachanas said. “We have existing investors, institutional players that know us from the listed fund that are considering supporting the new fund [as well as] institutional investors that we know from Southeast Asia, continental Europe and the US.”
Victory Hill’s first fund, VH Global Sustainable Energy Opportunities, which was listed on the London Stock Exchange last February, raised £242.5 million ($329 million; €290 million). As of 30 September, it had deployed 92 percent of net proceeds, investing in assets including solar farms in Brazil and Australia – the latter with embedded energy storage; terminal storage assets in Texas; and net zero flexible power generation projects in the UK.
“[The private fund] doesn’t have the focus of the listed fund, which is ‘let’s look at the situation today and try to resolve issues today that are required to make things a little bit more sustainable,” Catachanas said.
“Instead, the new fund, VH Global Energy Growth Fund I, aims to provide capital to developers, development companies around the world, to support them at the balance sheet level, growing their presence, their market share, creating new asset classes within energy for a more sustainable future,” he explained.
“In general, we’re looking at renewable power generation developers that do things like floating technologies or groups that have containerised mobile power units that could be deployed very effectively and very fast.”
From a risk-return perspective, the new private fund is growth equity rather than infrastructure, “but it is infrastructure exposure ultimately, that drives the returns”, Catachanas said. “The returns that we’re generating from these investments come from the development of projects and then long-term contracted cashflows that go with those projects,” he added.
The fund will invest in OECD countries and key partner countries of the OECD, as well as the EU, which includes non-OECD countries such as Romania and Bulgaria. “We don’t have a particular attraction to those [two] markets but we want to include them in the remit.
“The key partner countries of the OECD are important because you have countries like Brazil, Indonesia and South Africa that we really like,” Catachanas explained. “These are markets that are in transition at the moment. Brazil arguably is very advanced in its transition and has beautiful preconditions to adding renewable technology.
“Markets like China, India and Russia, I think we’ll stay out of for the moment. They’re just very difficult jurisdictions to navigate and to invest in infrastructure in general,” Catachanas remarked.
The firm, which was founded in May 2020, is a spin-out of Mizuho Financial Group, where Catachanas was director, head of investment solutions EMEA, Asset Management One. The firm’s other co-founders are: Eduardo Monteiro and Richard Lum, co-chief investment officers; Lawrence Bucknell, general counsel and compliance officer; and Michael Egan, chief financial officer. All co-founders, with the exception of Egan, also worked at Mizuho.
Victory Hill “focuses on supporting and accelerating the Energy Transition and the attainment of the UN Sustainable Development Goals”, according to a statement.