Reuters reports that Terra Firma is raising a new USD 5 billion energy fund, targeting sustainable investments. Reuters was tipped by an unnamed source. The British PE fund manager will team with China Development Bank, which will market the new fund to potential investors in China, while Terra Firma will seek backers in Europe and the United States among traditional private equity investors and infrastructure fund investors, the person said.
Reuters says that the news signals Terra Firma’s plan to focus on potentially “safer” energy-related deals, after the firm lost GBP 1.7 billion of its own and investors’ money on record label and media company EMI. Since 1994, Terra Firma has invested nearly GBP 14 billion in 31 businesses with an aggregate enterprise value of over GBP 44 billion, according to Terra Firma’s website.
It was the top venture capital and PE investor in its 2011 clean energy league table with over USD 250 million invested. These kind of investments may offer lower-returns than the PE industry is used to, e.g. a 15 percent annual return, but are considered safer, says the article.