Terra Firma downsizes renewables fund by $1.5bn

The Guy Hands-led firm is now targeting $500m for the vehicle, which it will seed with a $100m cornerstone commitment.

European private equity firm Terra Firma has downsized its renewable energy infrastructure fund from $2 billion to $500 million, investment documents from one of the fund’s limited partners reveal.

Low Carbon Energy Investor, Private Equity International's sister title, reported that the downsizing, which comes after two years in marketing and several high-profile departures, will also affect its targeted internal rate of return (IRR), which is now decreasing from 15 to 10 percent. 

The fund will still focus on brownfield and construction-ready assets in the OECD, although the decreased IRR makes it unclear whether it will continue to pursue its original strategy of targeting assets needing significant operational and/or financial improvements.

For the full story, click here to visit Low Carbon Energy Investor.