KGAL raises €750m for European renewable energy fund, exceeds target

KGAL Investment Management has exceeded the initial €500m fundraising target it set out for its fourth European renewable energy vehicle by 50%.

The KGAL ESPF 4 fund, which closed on 30 September, has raised €750m at its final close after receiving capital commitments from investors from 13 European and Asian countries.

KGAL said Dutch and French investors were particularly strongly represented.

KGAL ESPF 4 held its first closing in mid-2017 and acquired its first project in mid-2018.

Florian Martin, managing director of KGAL Capital, said: “Institutional investors’ interest far exceeded our expectations.”

Martins said a total of 32 institutional investors subscribed as of 30 September 2019.

“With almost €600m of commitments from international institutional investors, our investor base has now expanded significantly.”

KGAL ESPF 4 invests predominantly in wind, solar and hydroelectric power in Europe. It is also able to invest in additional technologies relating to renewable energy and storage, as well as network infrastructure. KGAL is pursuing a core-plus strategy, which combines greenfield and brownfield investments in a targeted manner.

Michael Ebner, spokesperson for the executive board of KGAL Investment Management, said: “We benefit from being able to cover the entire value chain on a flexible basis.

Ebner said the fund has to date allocated €280m in equity capital for six projects: two currently in operation, two in construction, and two in project development. This corresponds to a capacity of around 350MW.

Alexander Rietz, portfolio manager for KGAL ESPF 4, said the fund has signed exclusivity agreements to secure access to an additional 1,000MW of renewable energy projects in various countries.

Senior sales director Tim van den Brande said the fundraise for the latest fund brought on board a total of 32 institutional investors from 13 countries, including many blue-chip investors.

“Around a quarter of the investors are based in Germany and three quarters are from elsewhere, with Dutch and French investors particularly strongly represented.”

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