Capital Dynamics led all aspects of the investment process, including deal origination, negotiations and structuring, as well as late-stage project design activities, and also oversaw construction of the projects in the portfolio.
ZUG, Switzerland, April 23, 2014 – Capital Dynamics, a global private asset manager, has successfully completed the investment program for its US Solar Energy Fund. The Fund committed over USD 280 million in equity capital to 40 solar PV projects located in five US states and has already generated tax equity and related proceeds of over USD 110 million for its investors to date.
This Fund is one of several funds managed by the Capital Dynamics Clean Energy and Infrastructure (CEI) team. In addition to solar, Capital Dynamics has invested significantly in gas-fired generation, biomass and wind, in line with its strategy of broad power infrastructure investment.
The US Solar Energy Fund reached a final close in June 2012 at USD 282 million of commitments from a diverse group of institutional investors from the US, UK, Australia, Japan, Germany and Korea. The US Solar Energy Fund was the largest renewables infrastructure fund raised globally in that year.
Capital Dynamics has successfully built a diversified portfolio of 40 solar PV projects comprising more than 75 MW of generating capacity across California, Massachusetts, New Jersey, Pennsylvania and New York. Today, over 80% of that capacity is complete and generating cash. Construction of the remaining projects is expected to be finalized during the next six months.
The Fund's portfolio benefits from long-term power sales contracts with over 16 investment-grade entities, such as electric utilities, municipalities and corporate customers.
Capital Dynamics led all aspects of the investment process, including deal origination, negotiations and structuring, as well as late-stage project design activities, and also oversaw construction of the projects in the portfolio. The team directly procured major equipment from a variety of global manufacturers including solar modules, inverters, and tracking, monitoring and racking systems. The Fund's final portfolio comprises both fixed and single-axis tracking, ground-mounted PV systems, integrated carports and commercial roof-mounted structures. Several projects represent milestones in the US solar market to date.
Capital Dynamics employed an all-equity financing strategy for the portfolio, using institutional capital to build out the portfolio projects quickly, at low cost and with significant transactional efficiency. A specialist Capital Dynamics technical team located in Scottsdale, Arizona supervises the day-to-day operation of the Fund's diverse portfolio of operating assets. This includes real-time production monitoring, enabling maximization of revenue through operational excellence. The portfolio contains an extensive range of Tier 1 solar modules, inverters and racking systems.
"We are delighted to have succeeded in building a large and well-diversified portfolio of projects on both US coasts that is already paying cash distributions to our investors," said David Scaysbrook, Managing Director and Global Head of CEI at Capital Dynamics. "Investors will continue to benefit from a de-risked stream of cash flows based on a debt-free operating portfolio, long-term sales contracts with blue chip customers and an average customer credit rating of A (S&P). In finalizing this portfolio, we have completed the first step in our strategy of targeting risk-adjusted returns and long-term cash yields by being an early mover in the US solar market."
"Capital Dynamics' unique insight into the burgeoning US solar PV market has allowed the effective deployment of this Fund on behalf of its investors," said Stefan Ammann, CEO of Capital Dynamics. "Our position in the US market contributes to the overall strength of our global investment platform. And now, with the completion of the investment phase of our US Solar Energy Fund, we can continue to seek new and interesting areas of investment for our limited partners."
Capital Dynamics' CEI team
Capital Dynamics' CEI team holds extensive expertise in investing, financing, owning and operating conventional and clean energy assets and businesses globally and is led by senior executives who each have over 20 years of combined industry and direct investment experience. Established to capture attractive investment opportunities in this new class of real assets, Capital Dynamics' CEI business mandate is to invest directly in proven clean energy technologies – such as solar, wind, biomass, conventional cogeneration and waste gas fuelled power generation – across the globe. Since establishment of Capital Dynamics' CEI business in 2010, the CEI team has successfully acquired, built or is constructing, and now manages, more than 800 MW of clean energy capacity in North America, Europe and Australia spanning solar PV, wind, biomass and landfill methane recovery.
Capital Dynamics is an independent, global asset manager, investing in private equity and clean energy infrastructure. We are client-focused, tailoring solutions to meet investor requirements. We manage investments through a broad range of products and opportunities including separate account solutions, investment funds and structured private equity products. Capital Dynamics currently has USD 19 billion in assets under management/advisement1.
Our investment history dates back to 1988. Our senior investment professionals average over 20 years of investing experience across the private equity spectrum2. We believe our experience and culture of innovation give us superior insight and help us deliver returns for our clients. We invest locally while operating globally from our London, New York, Zug, Beijing*, Tokyo, Hong Kong, Silicon Valley, Sao Paulo, Munich, Birmingham, Seoul, Brisbane, Shanghai* and Scottsdale offices.
1Capital Dynamics comprises Capital Dynamics Holding AG and its affiliates; assets under management/advisement, as of September 30, 2013, include assets under discretionary management, advisement (non-discretionary), and administration across all Capital Dynamics affiliates. Investments are primarily on behalf of funds managed. 2Average years of experience held by Capital Dynamics' 20 most-senior investment professionals. *Capital Dynamics China is a legally separate company operating under a strategic cooperation with Capital Dynamics.