Equis in $1.7b fundraising bonanza

The product was Japan Solar, a dedicated platform run by Nippon Renewable Energy (NRE), a team of local operators assembled by Equis. The platform received an initial equity investment of $250 million but now the capital commitment stands at $720 million. NRE claims to be one of Japans' largest solar utilities.

Growth has been so rapid that Equis recently raised a $400 million pool of co-investment capital to support Japan Solar and Energon, an India and Southeast Asia wind energy platform.

"We bottom-up benchmark and target our sectors," says David Russell, CEO of Equis. "That process, and forming management teams that attack those strategies, can take 6-24 months. Once we get to that point of the first investment we have already identified the strengths and weaknesses of the sector, why we need to be there, and the management team. It is then a very quick process of deploying capital into multiple asset strategies."

The $400 million pool was raised alongside a $300 million top-up vehicle to support portfolio companies in the GP's first fund - which closed at $647 million in late 2012 - over the coming year, and then $1 billion for Fund II. Structuring the additional investments for Japan Solar and Energon was the only way Equis could deliver the capital required without exceeding the diversification limits on its funds.

Fund II spent less than six months in the market and the GP increased the hard cap from $900 million in order to accommodate some of the excess demand. Fund I has exposure to wind, solar, biofuels and telecom infrastructure in Southeast Asia and gas distribution and storage in China, as well as Japan Solar and Energon.

Not including the $400 million sidecar, the fund has generated around $350 million in co-investment and Russell expects much the same from its successor vehicle. Three investments, accounting for up to 37% of the corpus, have already been closed.

Russell sees Equis' strategy of creating utility platforms as key to its success: the GP has 315 people working across its various platforms and retains control over them, allowing flexibility in terms of financing and operation. This flexibility should also extend to exits, with public equity markets and local institutional investors seen as potential options.

"Where they are structured properly and you can facilitate a simple exit back to these local sources of capital," Russell says. "For strategics coming into Asia for the first time, we are also one of few groups that could offer exposure across the region and across different disciplines."

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• Topics
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• Equis Funds Group
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