Northern Lights buys into clean energy firm

Northern Lights Capital Group has taken a minority stake in the investment firm founded by DE Shaw’s former director of investments in India.

Northern Lights Capital Group continues its strategy of buying minority stakes in private equity firms that boast brand-name talent. The Seattle-based asset management’s latest target was Nereus Capital, the firm founded by Jonathan Winer, who formerly headed DE Shaw’s private equity team for India.

Terms of the latest transaction were not disclosed, but as a minority stakeholder Northern Lights will offer Nereus growth capital to bolster its fledgling operations, which are headquartered in Mumbai. Nereus is expected to close its first private equity fund in 2011.

“We loved the investment team we saw at Nereus, and we also loved the space they were focused on. Their emphasis on alternative and clean energy in India poses some interesting investment opportunities as the country continues electrification and expands its power grid,” Northern Lights Managing Director Timothy Carver told PEO.

Nereus’ investment focus will include generation, solar power, hydro-electric plays and other portfolio bets targeted at clean energy across the Indian subcontinent, according to the firm’s chairman Andrew Turner.“Unlike the case in North America, where you have an already-developed infrastructure, in India those barriers don’t exist.”

Earlier this year, Northern Lights took a minority stake in the Aldenwood Group, a specialist in sales in secondary markets. Red Wood Shores, Calif.-based Aldenwood is headed by Jamie Hill, a former partner at Oak Hill Investment Management, and Phil Durden, who came from Lexington Partners.

Northern Lights’ India bet via Nereus comes just weeks after the US Overseas Private Investment Corporation announced it would be raising a $300 million fund aimed at nurturing clean-energy alternatives in South Asia. OPIC has already earmarked $100 million of that sum for the fund, which will primarily target India.

Meanwhile, Northern Lights Capital Group is looking to take additional strategic stakes in private equity groups. Carver said he expects his firm will take a stake in its next target in early 2011.

“Valuing private equity firms is something that must be done very carefully. But we are looking for boutique firms headed by teams that will provide the next generation of leadership for the industry, and it’s on that basis we place our chips,” Carver told PEO.

“Since we are taking stakes in investment management firms, we feel that investing with top talent at an earlier enough stage is the best place you can hope to be,” he said.