World’s first listed storage fund targets £100m

The offering proposed by Gore Street Capital is eyeing a 1.3GW pipeline and is looking to generate an IRR of between 10% and 12%.

The world’s first listed energy storage fund has been launched on London’s Stock Exchange, targeting proceeds of £100 million ($138.9 million; €112.7 million).

Managed by investment firm Gore Street Capital, the fund is seeking a listing on London’s main market and has secured cornerstone investments totalling £16 million, primarily from Japanese duo NEC Energy Solutions and Nippon Koei.

Gore Street has already worked with NEC on two of the three assets that will seed the portfolio – Boulby (6MW) and Lower Road (10MW) – in which it holds full ownership, while it also has a 49 percent stake in the 4MW Cenin project.

Gore Street will target between 10 and 12 investments from the £100 million fundraising, all on a largely unlevered basis, seeking to generate returns of between 10 percent and 12 percent. The company is currently studying a pipeline totalling 1.3GW in the UK, Ontario and California, with the fund able to invest 30 percent outside the UK.

“This is predominantly a UK story,” Alex O’Cinneide, chief executive of Gore Street, told Infrastructure Investor. “We do have the ability to invest somewhat overseas and we will see how that develops but, overall, this is a UK investment story. Combining multiple types of revenue contracts in the same facility makes the UK the most attractive market in the world currently for energy storage.”

O’Cinneide, former head of investments at Abu Dhabi’s Masdar, pointed to the decommissioning of significant volumes of power, the rise of renewables and the growth of the electric vehicle market in bringing down the cost of lithium ion as reasons for the UK’s potential for success in this sector.

While the Gore Street Energy Storage Fund is the first such listed vehicle, the world’s first energy storage fund was launched by Zurich-based SUSI Partners in October 2016 and the unlisted fund is expected to reach a €250 million close in the coming months.

“We think the characteristics of the very strong income streams, well supported by the returns from the assets we’re invested in, combined with the long-term contracts in place and the very low technology risk, are appropriate for a public equity investor,” O’Cinneide added. “The public market vehicle will in the future will give us optionality in terms of raising more money in an efficient way to really scale the opportunity.”

Gore Street’s team includes two managing directors joining O’Cinneide. Peter Gutman, former global head of energy and infrastructure at Standard Chartered has come on board alongside Suminori Arima, who led renewable energy transactions as managing director of Kleinwort Benson.