Resonance Asset Management LLP raised $100 million and bought four British wind farms as it targets assets with long-term returns and state backing.
The U.K. company won commitments from institutional investors including pension and insurance funds for its first Resonance British Wind Energy Income fund, Chief Executive Officer Nick Wood said. The venture has spent 86 percent of the capital including its acquisition of the wind farms in Scotland, Wales and northern England, he said.
The deal follows similar moves by Greencoat U.K. Wind Plc, a British fund that buys U.K. wind parks from developers boosting their cash flows and offering investors stable returns. Investors such as retirement and insurance funds are buying into renewable projects that can generate power for more than 20 years and receive state subsidies.
“They are very attractive, cash-generative assets for institutional investors,” Wood said by phone from London. “We see this end of the market as quite fragmented and starved of exit capital, which provides us and our investors with an opportunity to bring it in for developers.”
The company, established in 2012, expects to raise about the same amount again this year seeking more than 50 megawatts of small and medium-sized wind farms, he said. It is also planning further funds that will invest in assets including water, waste management and transportation, Wood said.
The wind farms purchased by the fund include the 6-megawatt Bettyhill on the north Scottish coast from North British Windpower and Invenergy LLC of Chicago. It also bought three parks at industrial sites in Cumbria, Lancashire and Newport of Wales totaling 11 megawatts from funds managed by HgCapital LLP, Wood said. HgCapital said in a separate e-mailed statement the sale completes the exit of its HgCapital Renewable Power Partners fund’s U.K. investments, following the sale of its RidgeWind investment to insurer Munich Re and Blue Energy Co.
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