Hamburg, 22nd March 2023 – Aquila Capital, the sustainable investment management and asset development company headquartered in Hamburg, Germany, announces that capital commitments for the Aquila Capital European Balanced Renewables Fund (EBRF) exceeded EUR 500 million in the fourth quarter of 2022, showcasing the attractiveness of the investment proposition. The strategy is based on a diversified clean energy portfolio spread across continental Europe and Ireland. EBRF targets assets where the energy source is in high abundance, including Nordic wind farms and Iberian solar PV plants. It is conservatively positioned with a low use of leverage. EBRF’s income mix is diversified by contract type. Fixed price PPAs provide certainty and earnings visibility, while merchant exposures provide inflation correlation. This combination offers downside protection while preserving the potential for upside from elevated power prices.
Japanese institutional investors make up a significant proportion of the investor base, while institutions from continental Europe account for the majority of the Fund’s capital commitments. EBRF had its first close in June 2019 following a cornerstone investment from Willis Towers Watson.
Lars Meisinger, Head of Client Advisory International at Aquila Capital, comments: “EBRF pursues a balanced approach to portfolio construction by diversifying risks across generation technologies, geographies, power markets and regulatory regimes. Projects are located across six countries and six power markets. We recently added co-located storage to the portfolio and consider this a particularly attractive investment opportunity. The addition of battery energy storage systems means additional return opportunities as well as a further source of risk diversification.
Evergreen funds are gaining traction among limited partners, because they provide a higher degree of flexibility compared to closed-ended structures. Open-ended funds can constantly raise capital, so investors can choose to add to their positions over time. In the same spirit, investors can also adjust their positions, if needed, as part of a more dynamic asset allocation in private markets. EBRF is an open-ended Luxembourg SICAV-RAIF. As a so-called evergreen fund, it has no maturity date, which increases flexibility for investors.”
Roman Zervas, Team Head Fund Management Clean Energy and the manager of EBRF, adds: “Strong performance and continued high levels of interest from investors validate the strategy and philosophy we have successfully pursued since EBRF’s inception in 2019. The balancing of risks will remain a core element in the strategy, while the Fund’s share of projects under construction is to be expanded. This will allow a higher return potential to be secured, compared to investing in downstream project stages. The portfolio’s exposure to Southern Europe will also be increased, mainly through investments in solar photovoltaics, in order to seize some of the opportunities available in these markets.”
