An Infinis Wind Farm
LONDON (Reuters) - Together, the companies are expecting to start
“raising between $3 and $5 billion in the next few months, with
China Development Bank to put an as-yet-undefined amount into the
fund, a person familiar with the situation said.”
This new move is giving Terra Firma the opportunity to repair its
somewhat tarnished reputation after losing EMI to Citigroup last
year. It may be able to do so by refocusing on important core
investments in areas like energy and infrastructure.
There are three large renewable energy companies that are already
owned by Terra Firma, so this move isn’t out of nowhere. The company
Infinis that harvests landfill gas, the U.S. wind farm group
EverPower, and Italy’s leading solar power generator Rete
Rinnovabile have been under Terra Frima’s ownership and have been
performing well, and the company has already done many successful
deals in the utilities industry.
Creating this new fund clearly shows that Terra Firma has confidence
in the continued growth of renewable energies even after some
governments have chosen to reduce their subsidies in the wake of the
ongoing financial crisis.
“Such cuts have not much dented the investment picture overall and
global spending on renewable energy reached $257 billion in 2011,
according to a report according from the United Nations Environment
Programme and the Renewable Energy Policy Network for the 21st
Century, nearly the total in 2007.”
There has been a growing number of large private equity firms
investing in renewable energy deals; including the firms KKR and
Blackstone, along with mid-sized rivals HgCapital and Bridgepoint.
China Development Bank is planning to market the new fund to
investors in China, and Terra Firma will pursue investment in the
United States and Europe amongst “traditional private equity
investors and infrastructure fund investors,” Reuters reports.
“Terra Firma, whose last investment was the 825 million pounds ($1.3
billion) purchase of care homes operator Four Seasons in April, put
plans to launch a buyout fund on ice earlier this year after scant
interest from its private equity investors.”