Private equity house Oxford Capital Partners is aiming to raise £100 million ($150 million) in its first UK renewables-focused fund aimed at institutional investors.
The Oxford-based firm is fundraising for Infrastructure III LP, which will invest in ground-mounted and rooftop solar photovoltaic assets that are either operational or in construction.
With targeted internal returns of 7-9% (after fees have been deducted), a high proportion of its revenues linked to inflation, and no exposure to development risk, the fund aims to appeal to institutional investors with long-term liabilities.
The capital raised will be allocated to a defined pipeline of projects, meaning that there is no 'blind pool risk', and funds will be quickly deployed, said Sachin Bhatia, an investor relations manager at the private equity firm.
The fund's strategy is to operate the assets for the duration of their lifetime, and to seek investors willing to hold the fund for its 25 year life. However, there will be early redemption windows in the fifth, 10th and 15th years of the fund's life.
Oxford Capital aims to reach a first close in the first half of 2015 and is already in negotiations with a number of local authority pension schemes, added Bhatia.
The fund will be the third that Oxford has launched as part of its infrastructure investment programme, which aims to raise £500 million over a five year period.
Oxford's previous two funds, which currently manage some £150 million of assets between them, were focussed on private clients rather than institutional investors.
Peter Cripps
