Banks' tendency to lend senior debt for renewable energy projects leaves an opening for private lenders to bankroll wind and solar projects with mezzanine financing – a void in the market that Pegasus Capital Advisors hopes to fill.
The asset management firm announced last week it hired former Rabobank managing director Thomas Emmons to focus on providing mezzanine debt to renewable energy and infrastructure projects.
Emmons' position is a new one and he began working in the firm's New York office in August. He works with his former Rabobank colleague, Edward Levin, who joined Pegasus in 2013.
Emmons told Private Debt Investor that wind and solar projects provided two-thirds of new electricity generation capacity in the United States last year and the market is expected to continue growing into the future. Emmons said banks, like the one he recently departed, usually offer more senior loans to finance wind and solar energy construction.
“We consider renewable energy to be mainstream and not peripheral,” Emmons said. “The financing markets are being asked to provide debt and equity to finance those projects.”
At Rabobank, Emmons served as a managing director for seven years, according to his LinkedIn profile . Previously, he spent six years as a senior vice president and head of energy originations in the Americas at HSH Nordbank, according to the profile.
Pegasus is an asset manager founded in 1995 that provides capital to mid-market companies in line with its principal investment theme of global resource scarcity. The firm has approximately $1.7 billion in assets and maintains offices in New York and Cos Cob, Connecticut.