First closing at $45.1 million (€45 million) for the Ver Capital Sinloc Transition Energy Fund, which aims to be the first true national fund dedicated to energy transition. The private equity fund had been announced in October 2020.
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The Energy Transition Fund is set up as an impact investing platform in the energy transition and renewable energy sector
However, the vehicle promoted and managed by Ver Capital with the support of Sinloc in the role of technical advisor has a final funding target (hard cap) of $200.6 million (€200 million), with a net return target for investors of 10 percent. The Fund’s main objectives include mainly improving the energy efficiency of large public buildings such as hospitals, schools, or museum hubs, developing smart cities, focusing on the digitization of parking lots and street lighting, and building all plants for renewable energy production.
The joint team of Ver and Sinloc can count on a significant pipeline of investments stemming from established relationships with industrial partners, within non-competitive frameworks, mainly in public-private partnerships, which already meet a significant part of the fund’s investment needs.
The Energy Transition Fund is set up as an impact investing platform in the energy transition and renewable energy sector and is classified as an Article 9 under the SFDR (Sustainable finance disclosure regulation) directive, which is the maximum for a financial product targeting sustainable investments.
The approximately 15 investments the fund will focus on will generate energy savings equivalent to at least 9 thousand tons of oil equivalent (TOE) per year and avoid the emission of 15 thousand tons of CO2 per year, according to plans.
Investments in energy efficiency represent an opportunity for the investor, if well structured and managed, in relation to the excellent risk-return ratio, low volatility, and high predictability of cash flows, coupled with the positive environmental and social impact.
The possibility of intercepting investment operations with these characteristics is also supported by the results obtained by Sinloc, which, in the last decade, has activated more than 1.6 billion investments in the country in favor of the development of local infrastructure, renewable energy, and energy efficiency, mainly through public-private partnerships.
In order to optimize the cash profile of professional investors, the fund will see in the first two years of its life a prevalence of so-called brownfield initiatives and then give way to late greenfield initiatives in the second phase of the investment period.
“Ver Capital,” said managing director Andrea Pescatori, “has combined its management experience with Sinloc’s expertise in energy, with an innovative investment proposal that could generate investments of up to $1 billion (€1 billion).”
Added Sinloc’s CEO Antonio Rigon: “We strongly believe in this initiative, which will allow the Fund to make the best use of our national and European experiences in the energy field, and the country to focus even more on energy efficiency.”
Sinloc Spa, Sistema Iniziative Locali, is a consulting and investment company that operates throughout the country and is active in Europe on community-based projects. It promotes the development of local infrastructure, with consultancy and feasibility studies, with direct investment in Public Private Partnership projects, and by facilitating access to and effective use of European funds. The shareholding structure includes ten of the largest foundations of banking origin.
Ver Capital sgr for its part is a European manager of both open Ucits and alternative closed-end funds with a focus on credit, particularly European leveraged loans, European high-yield bonds, and Italian private debt instruments. The latest fund launched is Ver Capital Partners VII, a closed-end private debt fund in which EIF has already invested $50.1 million (€50 million) as well.
The fund takes the baton from the Ver Capital Credit Partners Italia V fund, launched in September 2016 and focused on Italy, and Ver Capital Credit Partners VI, launched in 2018, which invests in corporate loans from European issuers. Fund VII will invest in private debt from Italy, France, and Germany, to also enjoy geographic diversification. A portion of the fund will be allocated in the short term, pandering to working capital needs. Investors will also be able to apply for an EIF guarantee, which reduces the risk of investing in Fund VII by 50 percent. The launch of the latter vehicle was anticipated at the sgr’s 2019 Investor Meeting. On that occasion, Ver Capital also announced the launch this year of an Eltif and a new leveraged fund that invests in euro loans. To date, the sgr also manages Ver Capital Partners VI.
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First published in Be Beez, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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