There are two main purposes of this article. The first purpose is to discuss a private equity company involved in renewable energy investments. And the second objective of this article is to discuss other private equity houses investing in the renewable energy space. We will discuss this topic in accordance with Daniel Schäfer’s article “Winds of Change”. The company chosen to fulfill the purpose of this article is HgCapital. HgCapital is a private equity firm engaged in buyouts of small, medium and large companies across Europe.
The company invests in all sorts of industries, but has a dedicated renewable energy fund. It invests in five sectors: industrials, healthcare, TMT, services and renewable energy. The company was incorporated in 1985 under the name Mercury Private Equity. It is headquartered in London, United Kingdom. HgCapital has total assets of approximately $5.2 billion. It employs 80 people at its offices in Germany and the UK.
HgCapital was the first UK private equity fund to invest in the renewable energy sector. Today, HgCapital is considered the largest provider of renewable funds in Europe in terms of the amount of capital raised. It formed its first renewable energy investment team in 2004 and made its first investment in 2006 after thorough research of the sector. The team initially invested in Western Europe in renewable energy supply projects through technologies such as solar, hydropower and onshore wind. For this purpose, the company uses the “fund investment approach to infrastructure”. The company focuses on small hydropower and wind projects that are independent of government support. In Scandinavia, the company has grown to become the largest owner and player of onshore wind farms.
The renewable energy market is the fast and fastest growing segment in Europe. It is a potential investment opportunity for the investors. It requires significant capital investments. Economies of scale and technological advances have increased the sector’s cost competitiveness. In response to these market drivers, the company has increased its focus on using efficient and effective technologies and the best possible resource locations. This results in lower costs for consumers. In order to create strategic value and reduce its own costs, the company has decided to invest in the industrial scale.
Daniel Schafer’s ‘Winds of Change’ article highlighted the growing interest in private equity fund investments in the renewable energy space. According to the author, like HgCapital, Daniel, KKR and Blackstone have spotted a new investment opportunity. As already mentioned, renewable energy is the fastest growing sector in Europe. Therefore, it offers attractive and potential investment opportunities for many of the private equity funds. Between 2004 and 2006 there were a total of 70 renewable energy investments by private equity funds. However, the number rose to 170 investments in 2008.
A lot has happened this year. KKR, a US-based private equity fund, made its first investment in the renewable energy space. On the same day, Axa Private Equity becomes the fourth largest wind farm operator in France. After a month, another British private equity firm called Bridgepoint invested a sum in wind farms in Spain. In August of the same year, Blackstone, KKR’s rival, invested 2.5 billion euros in the construction of two offshore wind farms in Germany.
According to the author, a key reason why the renewable energy sector is a hot spot for investment is that it is immune and least affected by economic cycles. Wind and solar do not carry the same demand risk as gas, coal and nuclear. Even banks are willing to lend to invest in renewable projects. Renewable energies have become the most important generation of electricity. Solar power is second, but still lagging behind in cost. The author assumes that further investments will be made in the supply chain of this sector in the future.
The article is about a private equity company involved in renewable energy investments. The company selected for this is HgCapital. The company invests in all sorts of industries, but has a dedicated renewable energy fund. It formed its first renewable energy investment team in 2004 and made its first investment in 2006 after thorough research of the sector.
The article also covers the article “Winds of Change” by Daniel Schafer. The article focuses on private equity home investing in the renewable energy space. The private equity houses discussed in this article are KKR, Black Stone, Axa and Bridgestone. Renewable energies are the fastest growing sector in Europe. Therefore, it offers attractive and potential investment opportunities for many of the private equity funds. According to the author, a key reason why the renewable energy sector is a hotspot for investment is that it is immune and least affected by economic cycles. As the fastest growing sector in Europe, it offers an attractive and potential investment opportunity for private equity fund managers and companies.