Tom murley hg capital giff oecd 12 06 2014
•
0 likes•726 views
Mobilising capital to build a stronger, greener economy Presentation to the OECD, Paris 12th June 2014 Rob Cormie Chief Operating Officer
Recommended
Recommended
More Related Content
What's hot
What's hot (19)
Viewers also liked
Viewers also liked (10)
Similar to Tom murley hg capital giff oecd 12 06 2014
Similar to Tom murley hg capital giff oecd 12 06 2014 (20)
More from OECD Environment
More from OECD Environment (20)
Recently uploaded
Recently uploaded (20)
Tom murley hg capital giff oecd 12 06 2014
- 1. OECD GREEN INVESTMENT FINANCING FORUM Paris, 12-13 June 2014 Mobilising capital from institutional investors: opportunities and challenges for green investment banks Trends in Institutional Investment in EU Renewable Energy Projects Tom Murley Head of Renewable Energy, HgCapital
- 2. © Copyright 2013 HgCapital 2Sector expert investors supporting management to grow industry champions • Europe’s largest pure-play renewable energy infrastructure investor • Renewables sector established 2004 • €900 million of institutional equity capital raised since 2006 • Backed by leading global institutional investors • Dedicated team with 70+ years power sector experience • Part of HgCapital, a leading European Private Equity Firm • Founded in 1989 • Over €8 billion of capital committed to 7 funds since 2000 • Equity for growth buyouts and renewable energy infrastructure • Owned by partners and employees HgCapital Background Europe’s largest pure-play renewable energy fund manager €900 million of equity, invested in over 70 projects with over €2 billion in value Firm Snapshot
- 3. © Copyright 2013 HgCapital 3Sector expert investors supporting management to grow industry champions 35,374 49,416 43,768 57,735 59,305 44,103 23,739 3,762 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2007 2008 2009 2010 2011 2012 2013 2014 €Millions EU Refinancing EU M&A EU New Build EU: Macroeconomic and regulatory risks and finance shortage stalling growth EU RENEWABLE PROJECT INVESTMENT – NEW BUILD AND EXISTING ASSETS, DEBT, EQUITY, M&A, REFINANCING (2007-2014) Source: Bloomberg / New Energy Finance
- 4. © Copyright 2013 HgCapital 4Sector expert investors supporting management to grow industry champions OBJECTIVE Map institutional / financial investor equity investment activity in EU renewable energy projects and infrastructure companies since 2004 DATA COLLECTED AND ANALZED >450investments, €18 billion equity investments by >90 financial investors, including >20 Dedicated renewable infrastructure funds 3 Dedicated renewable private equity funds 25 General infrastructure funds 2 Hedge funds 5 General private equity funds >20 Direct investors – pension funds, large family offices and insurance companies, average AUM>€10 billion 6 listed renewables funds UK Green Investment Bank (direct equity investments only) Excluded German and Danish retail investor funds Regional and small sector funds with <€75m or less in capital (e.g. small solar funds) UK EIS and VCT funds (e.g. Octopus) Small family offices making a few investments SOURCES AND METHOLOGIES Sources: Prequin, Bloomberg New Energy Finance, New World Energy Network, Sparkspread, Infrastructure Journal, Fund Manager Websites, HgCapital discussions, Fund manager conference presentations Equity invested based on reported data sources, or if not reported using standard industry comparable (e.g. average selling price of German wind farms circa€1.6m/MW and 75% average gearing, average Italian solar pv deal equity circa €600k per MW). +/- 5% error on deployment. Institutional equity investment in EU renewables 2004-2014 Dataset and methodology
- 5. © Copyright 2013 HgCapital 5Sector expert investors supporting management to grow industry champions 274 345 450 540 691 812 1,111 4,096 2,011 4,160 3,346 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Other Public Bank Renewable PEFund Hedge Fund General PEFund Listed Renewable Fund Infrastructure Fund Insurance/Pension Fund Unlisted Renewables Fund Rapid growth in institutional equity investment Source: Proprietary HgCapital research. INSTITUTIONAL EQUITY INVESTMENT IN EU RENEWABLE PROJECTS (€ MM.) BY INVESTOR TYPE Investment Trends
- 6. © Copyright 2013 HgCapital 6Sector expert investors supporting management to grow industry champions 274 345 450 540 691 812 1,111 4,096 2,011 4,160 3,346 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 UK Sweden Spain Ireland Italy Germany France Denmark Other INSTITUTIONAL EQUITY INVESTMENT IN EU RENEWABLE PROJECTS (€ MM.) BY COUNTRY Shift to Northern Europe (and the UK in particular) Source: Proprietary HgCapital research. Investment Trends
- 7. © Copyright 2013 HgCapital 7Sector expert investors supporting management to grow industry champions 274 345 450 540 691 812 1,111 4,096 2,011 4,160 3,346 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Operating & Construction Development Operating & Development No Construction Risk Operating Construction Risk Strong institutional preference for operating projects (2013 and 2014 construction skewed by a few large offshore wind deals) Investment Trends INSTITUTIONAL EQUITY INVESTMENT IN EU RENEWABLE PROJECTS(€ MM.) PROJECT STATUS Source: Proprietary HgCapital research.
- 8. © Copyright 2013 HgCapital 8Sector expert investors supporting management to grow industry champions 274 345 450 540 691 812 1,111 4,096 2,011 4,160 3,346 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Project Debt Dev Cap P2P Growth Cap IPP Project Equity Strong institutional preference for project-level equity Investment Trends INSTITUTIONAL EQUITY INVESTMENT IN EU RENEWABLE PROJECTS(€ MM.) TYPE OF CAPITAL Source: Proprietary HgCapital research.
- 9. © Copyright 2013 HgCapital 9Sector expert investors supporting management to grow industry champions 274 345 450 540 691 812 1,111 4,096 2,011 4,160 3,346 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Merchant Semi Merchant Feed In Tariff Strong institutional preference FITs and UK RO (Semi-merchant = UK RO and Italian Wind) Source: Proprietary HgCapital research. Investment Trends INSTITUTIONAL EQUITY INVESTMENT IN EU RENEWABLE PROJECTS(€ MM.) REVENUE SOURCE (semi-merchant = UK)
- 10. © Copyright 2013 HgCapital 10Sector expert investors supporting management to grow industry champions 274 345 450 540 691 812 1,111 4,096 2,011 4,160 3,346 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Offshore Trans Hydro Biomass Biogas Solar Thermal Solar PV Offshore Wind Onshore Wind Strong institutional preference onshore wind, followed by offshore wind and PV Investment Trends INSTITUTIONAL EQUITY INVESTMENT IN EU RENEWABLE PROJECTS(€ MM.) TECHNOLOGY Source: Proprietary HgCapital research.
- 11. © Copyright 2013 HgCapital 11Sector expert investors supporting management to grow industry champions Institutional investors – stage / risk profiles differ among investors PENSION FUNDS/ INSURANCE LISTED FUND/PUBLIC BANK & OTHERS (€ MM.) GENERAL INFRASTRUCTUR E FUNDS (€ MM.) RENEWABLE INFRASTRUCTUR E,PE AND HEDGE FUNDS (€ MM.) Source: Proprietary HgCapital research. Others include funds of funds 0 500 1,000 1,500 2,000 2,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Operating No Construction Risk Operating & Development Development Construction Risk 0 500 1,000 1,500 2,000 2,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0 500 1,000 1,500 2,000 2,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
- 12. © Copyright 2013 HgCapital 12Sector expert investors supporting management to grow industry champions €0 €500 €1,000 €1,500 €2,000 €2,500 €3,000 €3,500 €4,000 €4,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 EU Renewable Financial Investors Investment by Ownership Share 2004-14 By Equity Invested (€MM) Minority Majority More minority interests as direct investors and GIBs emerge Investment Trends Source: Proprietary HgCapital research.
- 13. © Copyright 2013 HgCapital 13Sector expert investors supporting management to grow industry champions €0 €1,000 €2,000 €3,000 €4,000 €5,000 €6,000 Unlisted Renewables Fund Insurance/Pension Fund Infrastructure Fund Listed Renewable Fund General PE Fund Hedge Fund Renewable PE Fund Other Public Bank EU Renewable Financial Investors Investment by Ownership Share 2004-14 By Equity Invested (€MM) Minority Majority Direct investors and GIBs favour minorities Investment Trends Source: Proprietary HgCapital research.
- 14. © Copyright 2013 HgCapital 14Sector expert investors supporting management to grow industry champions 1 2 4 7 9 10 11 12 16 20 23 1 2 4 6 7 11 14 0 5 10 15 20 25 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 NumberofFundManagersandDirectInvestors CumulativeFundsRaised& CumulativeDirectInvestments (€Millions) Cumulative Listed Funds Raised Cumulative Direct Investment Cumulative Private Funds Raised Number of Fund Managers Number of Direct Investors Institutional investors increasing in number and capital EVOLUTION OF EU RENEWABLE POWER SECTOR INVESTMENT (2002 – 2014) Source: Preqin & Proprietary HgCapital research.
- 15. © Copyright 2013 HgCapital 15Sector expert investors supporting management to grow industry champions 2 3 4 5 6 9 10 11 13 15 15 0 2 4 6 8 10 12 14 16 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 NumberofFundManagers CumulativeFundsRaised$Millions Cumulative FundsRaised Number of Fund Managers We have seen a similar pattern before EVOLUTION OF US POWER SECTOR INVESTMENT FUNDS (1987 – 2014) Source: Preqin & Proprietary HgCapital research.