Aviva Investors, the asset management arm of European life insurance and pension provider Aviva, has announced the first closing of a renewable energy fund known as the Aviva Investors European Renewable Energy Fund. The amount raised at first closing was not disclosed. In total, the fund is aiming to raise €300 million.
The fund will be managed in partnership with SachsenFonds, the asset management subsidiary of KanAm Group, the Munich-based fund manager. The tie-up builds on an existing real estate partnership between Aviva Investors and SachsenFonds, which has seen them invest over €650 million in 30 real estate assets in Europe from three co-managed investment funds.
A statement from Aviva said that the fund would target a total net return IRR of 11 to 13 percent with a targeted income of 8 to 9 percent to be paid out annually. It will aim to build a diversified portfolio of renewable energy infrastructure assets with “proven commercial technologies” across solar photovoltaic, onshore wind and other clean energy sectors.
The fund, which will have a 10-year investment horizon, “will aim to deliver attractive risk-adjusted returns combining capital appreciation with regular income distributions from operating asset revenues, inflation protection features, real asset backing and absolute return potential”.
In the statement, Aviva Investors fund manager Ian Berry noted the “increasing appetite for clean energy investments driven by the convergence of natural resource constraints, public policy and technology innovation”.
The fund does not represent the first partnership formed by Aviva Investors for investment in infrastructure. Along with Hadrian’s Wall Capital, the firm is raising an infrastructure debt fund seeking as much as £500 million plus €500 million.