Uptake of offshore wind beyond Europe indicates traction around an investable asset class

first_imgUptake of offshore wind beyond Europe indicates traction around an investable asset class FacebookTwitterLinkedInEmailPrint分享S&P Global Market Intelligence ($):For investors like Glennmont, offshore wind’s journey to becoming an investable asset class points to an increased comfort with the risks in the sector. The industry has learned to deal with the technical and performance issues that hindered many of the early projects.“We still very much see the risks being present in this industry, but…the risk mitigation strategies are much more developed and advanced than they were historically,” Glennmont Manager Jay Sarma said. “That’s what gets us comfortable with the sector, more than the risks abating or disappearing completely.”Glennmont is the latest in a long and increasingly diverse list of new players in Europe’s offshore wind market — a list that includes some of the world’s biggest pension and investment funds; corporates such as Ingka Holding BV, IKEA’s parent company; and a host of strategic investors from Asia. Oil major Royal Dutch Shell PLC has also returned after years away.For these newcomers, the lure of the offshore wind industry is its core fundamentals: few other infrastructure asset classes can claim to regularly command nine-figure equity checks, boast steady pipelines of deals and are genuinely “green” investments. Combine these with the sector’s much better understanding of risk, and it is no surprise why offshore wind farms have become such prized assets.Faced with this heightened competition from an ever more crowded marketplace, many of the experienced offshore wind investors are now heading to new markets outside of Europe, including the U.S. and Taiwan. Others are seeking out earlier-stage opportunities on their home turf — a natural progression for a maturing industry.“Developers are selling stakes in these wind farms earlier and earlier in the development cycle,” said Ross Schloeffel, partner at the law firm Linklaters LLP. “Whereas previously we weren’t really seeing [offshore wind] M&A occurring until a project has hit [commercial operation], now we’re seeing M&A activity going on both during the construction phase…or even during the pre-construction or development phase.”More:  Competition for deals heats up as investors crowd into European offshore windlast_img

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