Starwood Energy powers up with $433m energy fund

The energy investment unit of Starwood Capital Group has raised its first fund targeting investments in the energy and power sectors in North America.

Private equity firm Starwood Energy Group Global, an affiliate of Greenwich, Connecticut-based Starwood Capital Group, has closed its Starwood Energy Infrastructure Fund with $433 million (€278 million) in equity commitments.

“We are very pleased with the response from the investor community for the Fund,” Barry Sternlicht, chairman and chief executive of Starwood Capital said in a statement, adding that the formation of Starwood Energy Infrastructure Fund was the result of a “focused business strategy” it had been pursuing for several years in the North American power generation and transmission sector. Investors included endowments, foundations, pension plans, banks, insurance companies and high-net-worth individuals.

The vehicle, which will acquire and fund development of energy infrastructure assets, has already committed more than $250 million to projects with costs of more than $1 billion. The firm is also targeting value-add greenfield and brownfield development opportunities comprising “build to suit” assets for “long term credit counterparty tenants.”

The fund’s exiting portfolio of energy assets include Midway, a 120 megawatt simple-cycle natural gas peaking plant located 60 miles west of Fresno, California currently under development and Thermo Ft. Lupton Facility, a 272 megawatt combined cycle natural gas power plant and associated greenhouse steam-host 25 miles northeast of Denver, Colorado.

Starwood also just launched an infrastructure finance group.