Bluefield to seek €500m for new renewable energy fund

Bluefield Partners, a London-based renewables investment firm, plans to raise up to €500 million for its next closed-end investment fund, with a first close in the first half of 2025, said co-founder and managing partner Giovanni Terranova. Infrastructure Investor in a recent interview.

While the fund won’t be Bluefield’s first, it will be the first vehicle to invest primarily in Europe across solar, wind and battery storage. It will also have some exposure to the U.K., the first market Bluefield targeted when it was founded in 2009. The U.K. is also the target market for the Bluefield Solar Income Fund, the first such fund listed on the London Stock Exchange, according to Terranova.

“This fund started in July 2013 with £130 million ($166 million; €154 million) and today has assets of around £1.4 billion,” Terranova noted. “That’s a 10-fold increase in 10 years.”

Since then, Bluefield has launched seven additional private strategies, most of which have targeted the U.K. solar sector. It wasn’t until 2019 that the firm expanded beyond the U.K., with three funds targeting solar in Italy and the Netherlands.

The last to do so, Bluefield Revive, was launched in 2021, reaching an oversubscribed hard cap of €100m. The firm now has assets under management of £2.3bn and its LP clients are mainly institutional investors from Europe and the UK, with family offices making up around 10 per cent of its client base.

The “foundation” of renewable energy sources

The next fund, however, is expected to “be a diversified multi-country strategy investing in wind, solar and battery storage,” Terranova explained, tapping into the firm’s Value-Add strategy. It will invest in greenfield as well as the renewal of existing assets. “(The latter) will be mainly for mature countries, such as Germany, Italy, France, the UK and wind in Spain, mainly.”

Still, a significant portion of the next fund’s investments — such as the company’s existing 1.3GW portfolio and its 2.1GW pipeline — will be in solar power, a sector that Terranova has described as the “backbone” of renewables, citing features such as modularity, low technology risk, relative ease of construction and stable profitability.

Wind power makes up about 15 percent of Bluefield’s portfolio and could potentially grow to 25 or 30 percent. As for energy storage, the percentage of standalone batteries will be “pretty low,” he said.

However, in the future, colocation services will constitute a larger part of the company’s portfolio.

“If you look at our larger portfolio, the UK portfolio, we are starting to retrofit existing assets by putting batteries in them. And I think in the future we will have to introduce storage because we will have two capacity curves: one for standalone solar and wind and one for shared assets (which can give better returns),” Terranova said.

Double-digit returns

The next fund will target double-digit returns, in line with the returns of all of Bluefield’s value-add funds. All of the closed-end funds met or exceeded their return targets, according to the firm’s website.

Asked whether repowering, which is less risky, would also generate lower profits, Terranova replied: “No, our experience so far is that profits for both wind and solar are double-digit. Maybe repowering will generate profits higher by 1 or 2 percent.”

He also noted that while asset modernization may be less risky, it is still a complex process.

“Reapplying for planning permissions, particularly for wind assets, takes a long time. In a sense it’s new construction, but you also have to deal with the removal of existing assets; you have to look at whether you can reuse some of the existing infrastructure. So you have to have the technical knowledge to do that.”

Bluefield Partners has built this expertise not only by investing in solar energy since 2009, but also through its business model. The investment firm is part of the Bluefield Group, which includes three other companies focused on technical asset management (Bluefield Optimisation), operations and maintenance (Bluefield Operations) and project development (Bluefield Renewable Developments).

“It’s kind of an end-to-end approach, which we think is one of the reasons we’ve done so well,” Terranova said. “We’ve spent a lot of time over the last 14 years building this operation.”