Greencoat Capital, a European renewable infrastructure investor, has held a first close of Greencoat Solar II (Solar II) with £262 million ($356 million) raised from some of the U.K.’s largest corporate pension schemes. Clients have now committed more than £560 million ($760 million) to Greencoat’s solar strategy.
Solar II follows the September 2016 close of Greencoat Solar I (Solar I), a £295 million ($400 million) segregated vehicle managed on behalf of a top-tier corporate pension scheme. As of August 2017, Solar I had invested over £260 million ($353 million) in a portfolio of 21 solar farms, ranging in size from 5 megawatts to 50 megawatts, with an aggregate capacity of more than 200 megawatts.
“We’ve seen continued strong interest in Greencoat’s solar offering, and are delighted by both the speed of growth, and the quality of the LPs involved,” said Lee Moscovitch, partner at Greencoat Capital. “Solar I is already substantially invested, and we are making fast progress on Solar II with £130 million [$176 million] under exclusivity. We continue to see opportunity for U.K. solar aggregation in a busy secondary market upwards of £20 billion [$27 billion] in size. Given our reputation for execution, and an ability to manage a wide range of assets, we are excited about Greencoat Solar’s prospects — our pipeline is looking very robust.”
Solar II is focused on the acquisition and management of a portfolio of mixed-scale, ground-mount solar PV in the United Kingdom. The vehicle aims to generate predictable cash flows with high inflation protection and low to no leverage, and intends to hold the assets for their full life.
“Renewables are no longer on the periphery of U.K. pension fund asset allocations; they are becoming mainstream investments for major funds,” said Richard Nourse, managing partner at Greencoat Capital. “U.K. solar PV assets provide the low-risk, predictable cash flows, low correlation and inflation-linkage that pension funds want to match their liabilities and close the funding gap. Many secure income markets are starting to feel quite crowded, but the opportunity for solar to deliver at a substantial premium remains attractive.”