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Ares powers on with residential solar fundraising, closes third fund with IGS Ventures on $150m


Ares Management has raised $150m for its third residential solar energy investment fund raised in partnership with IGS Ventures.

IGS Resi Solar III will be deployed to fund a portfolio of about 4,000 residential solar power installations with 25-year power purchase agreements or leases across multiple US states, the firm said.

The pair’s solar platform has now raised nearly $450m in total capital commitments, and is expected to build an aggregate portfolio of about 11,000 residential solar projects across nine US states, totalling around 100MW.

Mike Gatt, COO of distributed generation at IGS, said, “The solar market holds so much potential for growth as a way to provide sustainable energy to homes in a cost-effective way.

“Established investment parternerships like the one we share with Ares empowers us to bring solar energy to more homeowners so that they can realize significant financial and environmental benefits.”

In conjunction with the capital raise, the Sponsors also executed on a seven-year $146m senior secured financing with IGS Resi OpCo II, which included a $140m term loan facility and a $6m letter of credit facility.

Ares had $149bn of assets under management across private equity, credit and real estate strategies at the beginning of April.

 

The firm’s infrastructure and power strategy (AIP) looks to provide flexible capital for cash-generating assets across the climate infrastructure, natural gas generation, and energy transportation sectors.

AIP has deployed over $8.5bn of capital in over 140 investments and more than 200 different infrastructure and power assets and companies.

Last month reports surfaced that Ares was back in the fundraising market looking to collect €9bn for a new European credit fund, just two years after raising one of the biggest vehicles ever targeting the asset class in the region.

The firm hauled in €6.5bn for Ares Capital Europe IV in 2018, but is already eyeing a huge increase in capital through a successor fund according to the Wall Street Journal, which cited unnamed people it said were familiar with the situation.

Late last month Ares agreed to pay a $1m settlement to settle charges it was exposed to potential insider trading issues after buying stock in a company with one of its employees on the board.

The US SEC said Ares invested several hundred million dollars in an unnamed US public company in 2016, through a loan and equity investment that allowed it to appoint a senior employee to the company’s board.

Its report said Ares’s compliance policies failed to account for the special circumstances presented by having an employee serve on the portfolio company’s board while that employee continued to participate in trading decisions regarding the portfolio company.

 

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