Private Equity Deals & Transactions

CapDyn's clean energy fund is nearly fully invested

The Swiss fund manager's fourth clean energy fund is almost fully invested just a few months after its final close

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Capital Dynamics’ (CapDyn) fourth clean energy fund is almost fully invested just a few months after the Swiss fund manager held its final close in December.

The $462.5 million Clean Energy and Infrastructure Fund (CEI Fund) is being deployed in wind and natural gas-fired projects primarily in the UK and North America, managing director John Breckenridge told sister title Low Carbon Energy Investor.

“We’ve invested the vast majority of the fund already. Not quite 100 percent, but getting close to that point,” continued Breckenridge. “Based on what we have seen to date and the way our pipeline looks at the moment, we will have this fund fully committed this year. Perhaps early this year.”

To be an effective investor in late-stage development in the mid-market, you can’t be married to a technology as the power market is constantly changing, argued Breckenridge. Previous CapDyn funds have invested in solar, biomass and landfill gas. CapDyn’s approach instead is to look at the markets and ask: “Where is there an arbitrage between some fuel source and the price of electricity?”

“And whatever it is that you can sort of plug-in between the fuel and the electricity that makes the most sense, that’s what we will develop, as long there are no technology risks,” said Breckenridge. “So right now in North America with all of the coal retirements and the flood of natural gas, you have low natural gas prices and so places where you have modest electricity prices, it’s an opportunity to build a natural gas-fired plant.”

So what’s next for the CEI team at CapDyn?

“We are currently working towards the next type of financing, the next source of capital, whether that be direct accounts or whether that be blind-pool funds. I think right now all of those options are on the table,” said Breckenridge.

The CEI Fund originally aimed for a target of $750 million but fell $287 million short in December when it closed. Commenting on the shortage shortly thereafter, Breckenridge said in a previous interview with Low Carbon Energy Investor that CapDyn “just ran out of time“.

Since then, CapDyn has secured financing from GE Financial Services and Morgan Stanley to develop the 150MW Briscoe Wind Farm, in Texas.

This story originally appeared on Low Carbon Energy Investor