In a clear signal that the renewable energy industry is maturing, clean energy and resource efficiency specialised fund manager, Inspired Evolution, has successfully exited a number of its renewable energy investments held under its Evolution One Fund portfolio.
Evolution One is a USD90 million specialised fund focused on clean energy and environment sectors, backing proven technologies and strong teams in infrastructure-type and growth investments and related value chains. The sale of Evolution One’s stake in three of the assets was sold to an entity controlled by clients of TriAlpha Investment Management, facilitated by Gaia, an active secondary market player in the infrastructure sector. The other indirect stake in the fourth asset, the 138.6MW Cookhouse Wind Farm, was sold to Old Mutual Life Assurance Company (SA) Limited who is an existing shareholder in the project.
This sale of a combined 300 MW of operating clean energy power plants has materially contributed to the stellar return performance for Inspired Evolution’s investors against comparable global 2008 vintage fund benchmarks. Its returns make it one of the stand-out performers in its specialised clean energy and climate-related sector, globally. The successful exit of these assets and other earlier exits has allowed Inspired Evolution to return Evolution One’s entire capital back to its investors – all in just over six-years from its final close.
Inspired Evolution has built a credible track record having been involved in 913MW of renewable energy generation projects with multiple successes under a fiercely-contested procurement environment. Inspired Evolution is now pursuing a pipeline of new clean energy projects across sub-Saharan Africa at various stages of development. “We are looking to adapt and replicate our successful active investment management approach, strengthening our position as a leading equity partner in the region with proven credentials,” says Christopher Clarke, Co-Managing Partner of Inspired Evolution.
Moreover, this exit milestone comes simultaneously with the first closing of Inspired Evolution’s successor fund, Evolution II.
Evolution II achieved its first closing within 12 months after formally going to market, having raised USD90 million (c. ZAR1.2 billion) from international investors, with one remaining investor commitment conditional on a final approval in early March 2017. Co-Managing Partner, Wayne Keast, said that the fund’s investors comprised a mix of strategic international DFIs, specialised fund-of-funds, and a family office. Evolution II is targeting USD250 million (c. ZAR3.5 billion) for a final closing by end of 2017.
Evolution II is a 10-year closed-ended fund with a mandate for equity and equity-related investments into two principle investment streams: development and project finance infrastructure-type investments in clean and sustainable energy; and growth equity investments in energy and resource efficiency companies, and the value chains that support them.
Evolution II targets sub-Saharan African countries where growth prospects, ease of doing business, policy and regulatory certainty, and political stability and bankability offer compelling investment opportunities. The fund will contribute to addressing the growing need to replace ageing and inefficient carbon-intensive power plants as well as contribute to building least-cost, low-carbon clean and sustainable energy generation capacity to address the estimated 130 GW suppressed demand across sub-Saharan Africa’s high-growth countries.
Evolution II will also contribute to the need for improved energy and resource efficiency measures across business activities that span key sectors in sub-Saharan Africa. These sectors are experiencing growing energy and resource insecurity. Within this changing resource landscape, the responsible deployment of capital to companies that are ‘doing more with less’ is a compelling private equity growth story. Most business activities are located within the food, energy and water nexus that informs the climate mitigation and adaptation response priority within sub-Saharan Africa, and includes transport, industry processing and supply chain logistics.
Evolution II will look to provide investors with long-term capital growth through investments with significant minority or controlling equity and equity-related stakes. Where possible, the Fund will also look to provide inflation-indexed yields to investors from its operational assets for the duration of the investment holding term of the Fund.
For more information on Inspired Evolution Investment Management and Evolution II, visit www.inspiredevolution.co.za.