SEP gets Lexington backing to close £135m debut infra fund


hydro damScottish Equity Partners has closed a £135m infrastructure fund to target UK-based clean energy projects.

FTSE 100 energy company SSE and a syndicate led by secondaries giant Lexington Partners were among backers of the Environmental Capital Fund.

SEP said the fund had been anchored by the acquisition of an existing SSE infrastructure business, SSE Pipelines, which provides low-pressure gas connections for UK residential and commercial customers.

The firm said it planned to tap the rest of the fund for a diversified range of investments including hydro power, energy efficiency, heat pumps and district heating schemes.

SEP previously launched an Environmental Energies Fund in 2011, which acquired a portfolio of venture capital and private equity cleantech investments from SSE.

Firm managing partner Calum Paterson said, “This is another significant fund for us, which helps to broaden our reach without undermining our core focus.

“We are particularly pleased to extend our successful partnerships with SSE and Lexington Partners.

“The market opportunity for energy infrastructure finance is very attractive, and the new fund fits well with our existing activities.”

Lexington managing partner Marshall Parke added, “This is the second time Lexington has partnered up with SEP and SSE in an innovative secondary transaction, this time for the infrastructure and clean energy sectors.

“Both sectors are relatively new to the secondary market, and areas in which we expect to see more secondary activity in the future.”

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