Zouk Capital, the London-based fund manager, has raised €220 million at the final close of its second European renewable energy infrastructure fund known as Renewable Energy & Environmental Infrastructure Fund II (REEIF II).
“It was not an easy fundraising environment so the track record and experience of the team helped. We had a target of €200 million and we exceeded that, which is great,” Zouk infrastructure partner Colin Campbell told Infrastructure Investor.
The fund took around 18 months to raise and included unnamed public pension funds, sovereign wealth funds, insurance companies, funds of funds, corporates and large family offices.
The firm’s first renewable infrastructure fund was a €52 million vehicle which closed in 2008 and was focused on the solar sector. Last month, it completed the sale of a second portfolio of residential solar photovoltaic systems to insurer Aviva. The two portfolios together, comprising 20 megawatts, had a value of £76 million (€95 million; $125 million).
The second fund has a broader renewable energy remit covering what the firm describes as “niche and underinvested” markets in Europe such as waste-to-energy, geothermal, biomass, storage, energy efficiency and distributed small-scale energy.
The firm says it aims to bridge the funding gap between developers and long-term final acquirers of infrastructure assets. “We are happy with late-stage development risk and we can help a lot with things like contracts, EPC and financing etc.” said Campbell.
Asked about the gradual removal of subsidies from renewable energy, Campbell said that “it takes us back to what the energy market is traditionally all about, which is commodity risk. It’s about how you manage that risk and make sure you’re on the right side of it.”
Zouk Capital focuses on both growth capital and infrastructure and has around €600 million under management altogether. The renewable infrastructure team is headed by Campbell, a former chief executive officer of Killingholme Power Group, and Erich Becker, previously a senior managing director at Macquarie Bank.