Conquest AM, a Luxembourg-based asset management and advisory firm, has completed a first close for its renewable power fund, Conquest Renewable Yield Europe Fund,raising €115 million ($124 million) in equity commitments.
The fund received the equity commitments from European institutional investors, including insurance companies, pension funds, banks and global energy corporations.
Conquest Renewable Yield Europe Fund launched in January with a €500 million ($540 million) equity fundraising target. The fund has a 20-year strategy, deploying equity in OECD renewable power real assets, with a primary focus on Western Europe brownfield solar and wind portfolios. The fund will deliver a recurring annual yield to investors, with an unlevered or reduced debt exposure, in addition to a target exit IRR in line with the sector’s expectations.
“Infrastructure real assets, such as renewable power assets, offer this unique long-term predictable and sustainable cash-flow profile, which institutional investors tend to mirror in their ALM strategies,” says Frédéric Palanque, managing director at Conquest.
In a volatile market, with historically low long-term government bond yields, meeting asset liability matching requirements is challenging for institutional investors globally, according to Conquest. The alternative infrastructure sector, and the renewable real assets in particular, is increasingly providing opportunities for less correlated, inflation-linked and long-term yielding revenues, asserts Conquest.
“European investors have demonstrated to be bullish on the renewable power asset class, driven by the investment in new power generation capabilities to replace aging facilities with cost-effective solutions and compliant with the climate change concerns,” says Stéphane Wattez-Richard, director at Conquest.
The fund’s first close represents the depth of the brownfield real assets pipeline of the fund. Conquest hopes the first close will lead to transactions in the near future and present co-investment opportunities.