Riverstone, Hudson Draw Partners For Renewable Energy Funds

Last Update: 3/28/2008 8:13:46 AM

By Jonathan Shieber
Of DOW JONES NEWSWLETTERS

NEW YORK (Dow Jones)–Big private-equity shops, including Riverstone Holdings and
Hudson Clean Energy Partners, are making progress with fund-raising for renewable
energy and sustainability focused funds as the industry begins to see more
late-stage opportunities in the market.

New York-based Riverstone Holdings, for instance, has closed on approximately
$500 million for its targeted $4 billion renewable energy fund, according to
sources with knowledge of the fund.

The firm had targeted a first close of $1 billion, but accelerated the close so
that it could sign its first deal, a $500 million commitment to AES Solar, a
global utility scale solar developer, launched with independent power producer
AES Corp. (AES), according to one source with knowledge of the financing.

Riverstone declined to comment for this article.

(This story also appeared in LBO Wire, a newsletter published by Dow Jones & Co.
that covers private equity.)

Meanwhile, Hudson Clean Energy Partners has received a commitment for at least
$300 million from the Credit Suisse Group (CS). Through the agreement with the
Zurich-based financial-services firm, Hudson Clean Energy Partners will make
principal investments for Credit Suisse in the renewable energy sector. Hudson is
raising further financing for the fund.

Hudson not only gains capital, but adds a new partner in John Cavalier, the
former head of Credit Suisse’s renewable energy group.

While at Credit Suisse, Cavalier was involved in a number of the biggest initial
public offerings in the solar sector, including Suntech Power Holdings Co. (STP)
and SunPower Corp. (SPWR).

“I’ve had the opportunity to work with phenomenal entrepreneurs in renewable
energy,” said Cavalier in an interview, “but Neil (Auerbach) and his team were
also making real proprietary capital investments that made a real difference for
these companies.”

Hudson Clean Energy was founded in August 2006 by former Goldman Sachs Group Inc.
(GS) partner Neil Auerbach.

The firm held the first close on its debut fund in November 2007 with $60 million
in commitments from Macquarie Global Private Equity Securities Fund and the
Wolfson Group.

“We’re late-stage investors,” said Auerbach in an interview. “We look to
investment opportunities where the technology risk has been retired. We see
attractive investments across the clean energy spectrum: in wind, then in solar,
then in biofuels and other asset classes.”

Hudson Clean Energy will invest anywhere between $50 million and $500 million in
a single deal, according to a source with knowledge of the fund.

Auerbach and Cavalier declined to comment on the firm’s fund-raising activities
beyond the investment from Credit Suisse.

Even as two big private-equity shops make their closes, other firms are beginning
to develop their own plans around energy, sustainability and climate change.

Deutsche Asset Management is planning a climate change-focused private-equity
fund of its own, according to a spokesman for the firm. No target has been set
for the fund, but the firm is committed to climate change investing, the
spokesman said. News of Deutsche Asset’s plans were earlier reported by the
Financial Times.

“This is a very attractive time for a private-equity firm to be in the market
looking to make investments,” said Auerbach. “There is clearly an imbalance
between the amount of companies in the sector that are at the right stage of
development and the space for them to crowd into the capital markets.”

Did you like this? If so, please bookmark it,

$\\$

about it, and subscribe to the blog RSS feed.

Possibly Related Posts: