Renewable Energy and Private Equity Funds
twinqu | Skillful are two main purposes of this article. The primordial animus is to canvass a private equity company involved in forming investments in renewable energy sector. And the second aim of this article is to get together the wager of other private equity houses on renewable energy sector. We will take up this affair in cooperation with Daniel Schafer ‘ s article ‘ Winds of Pennies ‘. The company selected to fulfill the end of this article is HgCapital. HgCapital is a private equity firm who is engaged in buying out of bitty, back and immense size companies all over Europe. Renewable Energy and Private Equity Funds
The firm makes hazard in all sorts of industries but present has a specialized fund for renewable energy. Positive invests in five sectors: Industrials, Health burden, TMT, Services and Renewable energy. The company was down pat in 1985 by the term of Mercury Private Equity. Bona fide is headquartered in London, United Sway. HgCapital has total assets of around $5. 2 Billion. Certain has 80 Employees in its backing in Germany and United Province.
HgCapital was the initial UK Private Equity fund that involved in investing in renewable energy sector. Today HgCapital is considered to factor the largest renewable fund trouper in Europe in terms of the amount of finance certain raised. Concrete down pat its pristine renewable energy shot gang in 2004 and mythical its primary trial in 2006 nearest a indepth research of the sector. The Band initially invested in utility renewable project in Western Europe completed technologies selfsame over solar, hydro, and onshore wind. For that will the company uses ‘ fund fling passage for infrastructures ‘. The company focuses on shrimp hydro and wind projects which are independent of subjection flotation. In Scandinavia, the company has change into the supreme lessor and performer of onshore wind farms.
The renewable energy marketplace is the rapid and fastest growing segment in Europe. Indubitable is a abeyant attempt event for the investors. Essential requires considerable capital chance. Economies of scale and advancement in technology keep too many the cost competitiveness of the sector. Considering a response to these marketplace drivers the company has also its nerve center on the kick of efficient and energetic technologies and the best possible resource sites. This results in lower cost to consumers. In order to establish strategic value and to lower the intrinsic cost the company has decided to invest in industrial scale.
The article by Daniel Schafer ‘ s ‘ Winds of Change ‘ emphasized on the growing interest of private equity funds investment in renewable energy sector. According to the author, Daniel, KKR and Blackstone like HgCapital have discovered a new investment opportunity. As mentioned earlier renewable energy is the fastest growing sector in Europe. Hence it provides attractive and potential investment opportunities for many of the private equity funds. There were overall 70 renewable energy investments by private equity funds in between 2004 and 2006. However the number increased to 170 Investment during 2008.
There has been a lot of activity during this year. KKR, which is a United States based private equity fund, made its first investment in the renewable sector. The very same day Axa Private Equity becomes the fourth largest wind farm operator in France. After a month, another UK based private equity firm by the name of Bridgepoint, invested a sum in wind farms of Spain. In August the same year, Blackstone, rival of KKR invested €2. 5 billion for constructing Germany two offshore wind farms. See also, Know The Most F.A.Q About Auto Insurance
According to the author one major reason why the renewable sector is a hot spot for investment is because it is immune and least affected by economic cycles. Wind and solar energy does not bear the same demand risk as gas, coal and nuclear power. Even banks are willing to lend for making investments in renewable projects. Renewable energy has become the major power generation. Solar energy is in number second but still behind in terms of cost. In future the author believes that further investment will made for the supply chain of that sector.