KGAL achieves EUR-260m first close for pan-European renewables fund

German investment manager KGAL GmbH & Co KG has achieved a first close of EUR 260 million (USD 293.4m) for a new renewable energy fund that will invest mostly in wind and solar projects in Europe.

The raised funds are equal to more than half the KGAL ESPF 5 fund’s target, the German firm said last week. The equity funding was secured from institutional investors, insurance companies, pension funds, impact investment managers and family offices. Existing clients accounted for two thirds of the first closing, while the rest came from new clients.

The new fund’s first investment is a 100-MW solar photovoltaic (PV) project in the late development stages in Sicily, Italy. Talks are also in progress for “large-scale collaborations” with renewable energy developers in Germany and Spain, KGAL said.

While KGAL ESPF 5 will focus primarily on wind and solar, its portfolio will be diversified across technologies, regions and asset life cycles. Investment options for other renewable energy generation and storage technologies and grid infrastructure may also be pursued.

"With the acquisitions planned to date, we will achieve broad diversification of the portfolio, and we expect all of these investments to reach the upper end of the 7 to 9 percent target return range," said portfolio manager Carsten Haubner.

Almost 20% of the fund's committed capital is planned to be invested before the end of this year.

(EUR 1.0 = USD 1.129)

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