The company says the launch of the two new funds will complement the recently launched Quercus European Renewables fund to maximize the portfolio’s risk/return profile through a meticulous strategy of diversification.
Quercus is looking to raise a minimum combined target of €500 million across the three funds, which is to be invested in connected wind and solar plants in Italy, as well as in other renewable technologies throughout Europe.
The funds will have a long-term investment horizon of a minimum of 10 years and a targeted Internal Rate of Return (IRR) per annum of 8-10%, rising to 9-11% in the case of Quercus Italian Wind fund.
Investment in renewable infrastructure provides stable, long-term returns with a low risk profile that generates sustainable and predictable cash flows de-correlated from the fluctuations of financial markets. The funds therefore represent an ideal investment for long-term institutional investors, whose investment style is characterized by risk aversion and the need for capital protection.
In this global scenario, the Italian market is particularly attractive, given its stable policy with regard to incentives and its focus on renewable sources which are given grid priority. The Italian market is the fourth largest in the world for installed PV capacity (18.3 GW) and 9th for wind power (8.7 GW). The high degree of asset fragmentation in this large market presents significant opportunities for consolidation for players capable of financing, sourcing and executing on such opportunities.
Vito Gamberale, Chairman of Quercus commented: “Today, Italian renewables play a key role that I define with 3Ps: Predominant, Prevalent and Preferential. The Italian market remains extremely fragmented and presents significant opportunity for consolidation. Our strategy is clear, our goals are achievable and I look forward to contributing to the success of our new funds at Quercus.”