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Resonance Asset Management LLP, the alternative asset management firm specialising in energy assets, yesterday announced the completion of the acquisition of four operating wind farms by the Resonance British Wind Energy Income Fund, demand for which has been predominately driven by institutional investors. This takes total assets raised to $100 million in just 10 months.
The fund is consolidating the fragmented ownership of operating small and medium-sized wind farms in the UK with generating capacity of 2MW to 10MW - a niche area the firm is quickly taking ownership of. The fund, advised by Resonance, is ungeared and pays out all generated income to investors.
Investors in the fund are seeking regular income that is linked to the price of wholesale electricity in the UK and the subsidies from the Renewable Obligation regime. The fund's investors are pension funds, both corporate and local government, insurance funds and family offices. The investors reside in the UK and Europe, with a concentration in the Nordic region. Investor appetite is being driven by the need for secure, long term and inflation-linked income from an ungeared portfolio of operating real assets in a politically stable environment.
Resonance founder and chief executive Nick Wood commented:
"We've had a defining 2013, having seen an increase in commitments to $100 million from institutional investors meaning the fund is now 86% invested from capital committed. With a combined five acquisitions under our belt, totalling 23.9MW in just one year, we're actively considering further investments and continue to see attractive risk adjusted returns in this area for our investors. We very much look forward to further advancing our position in 2014."
Bettyhill Wind Farm, the first acquisition, has a capacity of 6MW, made up of two 3MW Enercon E-82 E3 turbines. It is located approximately 50 miles west of Wick on the north Scottish coast. It was developed by North British Windpower and Invenergy LLC of Chicago, USA.
The 11MW portfolio, the second acquisition, comprises five turbines across three industrial sites. The sites were originally developed through a joint venture between HgCapital Renewable Power Partners, HgCapital's first renewable energy fund, and Wind Direct, a subsidiary of Wind Prospect Group Ltd. Workington Energy Limited is based on the Eastman Chemical site in Cumbria. It consists of two REpower MM82s and has a capacity of 4MW. Newport Wind Direct Limited is located on the Eastman Chemical site in Newport and has a capacity of 5MW, from two Nordex N90s. Garstang Wind Direct Limited is situated at the Dewlay Cheese Factory in Lancashire and consists of one REPower MM82, giving it a capacity of 2.05MW.