Advanced Capital has launched an energy fund of funds aiming to raise a minimum of €300 million and a maximum of €500 million.
It will target between 15 and 20 fund investments, around half of which will target developed markets and half emerging markets.
Robert Tomei, Advanced Capital chief executive, says he expects around 60 percent to 70 percent of the fund will be committed to the traditional energy sector, 20 percent in renewables and alternatives and 10 to 20 percent in cleantech.
Tomei predicts around two-thirds of the fund’s capital will be committed by Italian investors and the remaining by international investors.
“There is increasing energy demand,” Tomei said. “In developing markets, energy infrastructure is increasingly necessary and, in the developed world, it’s about energy efficiency and lowering the environmental impact.”
In developing markets, energy infrastructure is increasingly necessary.
PEI’s recent Energy Forum in New York backed up Tomei’s optimistic outlook, with many speakers pointing to higher levels of activity despite the frozen credit markets and economic turmoil. “In the last year, we’ve seen an unprecedented amount of deal flow,” said Will Honeybourne, a managing director with New York-based energy specialist First Reserve, which is currently investing its latest $7.8 billion fund.
In the summer, Advanced Capital announced its intention to open a London office by the end of the year as the beginning of an ambitious expansion strategy. Tomei said that, in the medium term, the firm would also be seeking new offices in the US, the Middle East and Asia.
The firm raised Italy’s first ever private equity fund of funds, the $39 million ACI fund, in 2000. It then closed successor fund ACII on €321 million and, in March this year, posted a €140 million first closing for ACIII.