HgCapital raises renewables fund

The fund is looking for opportunities in the sector across the Continent, from development stage to operational phase, across a range of different technologies including wind power, biomass, landfill gas, waste, hydro, geothermal and solar.

Among the 16 investors in the Renewable Power Partners Fund are Dutch Pension Fund PGGM and the California State Teachers Retirement System (CalSTRS).

HgCapital started investing in energy deals in 2004 building a four-strong investment team, but this is the first time it has set-up a fund specifically aimed at the sector. Tom Murley, a director of HgCapital with 15 years experience in renewable and conventional power projects, said: “More than four years ago, we recognised the compelling investment fundamentals emerging in the renewable energy sector. We undertook comprehensive research and developed an investment strategy to access and optimise these opportunities for our investors.”

The firm has made five investments in the energy sector to date. These include Tir Mostyn, a 21.25MW wind farm in North Wales, Sorne Wind, a 32MW wind farm in Donegal, Ireland, Picardy Wind, a group of four wind farms in Northern France, and Wind Direct which develops, constructs, owns and operates onsite industrial wind farms. HgCapital also has a strong pipeline of opportunities across a range of alternative energy sectors including options on over 200MW of Italian wind farms in development.

Ian Armitage, chief executive of HgCapital, said: “By the time we brought this fund to market, we had undertaken five investments, comprising 500MW of renewable energy, in attractive projects which were in operation, construction or development. As a result, we were able to articulate and demonstrate a clear and deliverable strategy to generate strong results for our investors.”

HgCapital closed its generalist buyout fund, HgCapital 5, in February 2006 on £950m (€1.4bn). The fund, which was formally launched in late October, exceeded its £750m target. Limited partners include Gartmore, Goldman Sachs, Harvard Management, Ilmarinen, LGT, Metlife, Morley, Pantheon, Rolls Royce, Standard Life and Texas Teachers. In total, approximately 50 institutional and private investors worldwide supported HgCapital 5.