Resonance Asset Management, the firm set-up by former Man Group environmental head Nick Wood, has raised £35m towards its inaugural wind energy income fund, telling AltAssets it will not put a cap on fundraising.
The firm has a distribution agreement in place via boutique investment bank Dexion Capital with initial commitments raised from European pension funds, a UK life insurer and family offices, Wood revealed.
Resonance British Wind Energy Income Limited will look to buy operating UK wind farms, removing debt from any assets and paying out all income generated to investors.
It is structured as a collective investment scheme domiciled in Guernsey.
Wood said, “The £35m is a first close. Investors have come in and we have created the fund around them.
“We have other investments who are actively going through the fund now and more deals in the pipeline.
“We think it is a large opportunity measured in the hundreds of millions. We are not capping out this opportunity.”
The income is linked to the price of wholesale electricity in the UK and the subsidies from the Renewable Obligation regime.
Wood said, “We are delighted to both have a first close on the fund and make its first investment within the month.
“We are actively seeking further investments of operating UK wind farms for our investors.”
The first deal should close this week and although this fund will only buy up operating wind assets sub-10MW it is mulling the launch of a future vehicle to gain exposure to earlier-stage developments.
Wood said, “We see that as a funding gap on the equity side.”
The fund has a ten year time-frame, with the anticipation that assets will be held throughout this lifespan.
Wood said, “There is a substantial pool of assets in the UK. Wind farms are fairly priced; investors realise it is not a risk-free asset and what has to be paid for is sovereign risk.”
Resonance invests in long term, cash-generative real asset investments and was founded by Wood in 2011 after he left Man Group where he founded a private equity firm focused on environmental investing, Man Environmental Capital Opportunities (ManECO).
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