Real Assets Spotlight

VOLUME 2, ISSUE 5 ■ JUNE 2017

alternative assets. intelligent data. REAL ASSETS SPOTLIGHT

CONVENTIONAL AND RENEWABLE IN THIS ISSUE ENERGY

52% FEATURE 2 of conventional energy investors also now target Conventional and renewables, so here we take a look at this evolving market. Renewable Energy

FEATURE 6 Find out more on page 2 Infrastructure Fund Life Spans

INDUSTRY NEWS 9 INFRASTRUCTURE FUND LIFE SPANS THE FACTS ■ Overview of the 11 13.9 Years Agriculture Industry is the average life span of unlisted infrastructure funds ■ Wind Power Deals 13 closed since 2009, the longest among all private capital ■ Investors’ Source of 14 funds. We analyze how life spans for infrastructure funds vary by project stage and look at the proportion of funds Allocation that have requested extensions.

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www.preqin.com/contact | [email protected] CONVENTIONAL AND RENEWABLE ENERGY CONVENTIONAL AND RENEWABLE ENERGY Using data from the Preqin Special Report: Conventional and Renewable Energy, we take a look at this evolving market.

he energy industry has faced significant As such, fundraising for conventional UNLISTED ENERGY CAPITAL RAISED, Tchanges in recent years. Not only have energy vehicles – those with an energy 2008 - 2017 YTD oil prices continued to fall since 2014 – a investment remit focused on oil, natural (AS AT APRIL 2017) challenge for companies at all stages gas, coal, oil field services or a combination of the energy supply chain – but the of these – has declined significantly development of shale gas technology has (-41%) from the record levels seen in 2015 33% opened up new resources for extraction. (Fig. 1), in line with the fall in global oil The emergence of economically viable prices. However, as a crucial aspect of the 46% renewable energy assets represents a evolution of natural resources as a distinct significant shift in the energy landscape, asset class, the sub-sector still represents as well as an opportunity for investors in the largest proportion (46%) of energy 21% unlisted natural resources funds. Using fundraising since 2008. data from Preqin’s Natural Resources Online, we examine how fund managers Conversely, solely renewable energy Conventional Energy and investors are approaching both fundraising – funds with an energy Renewable Energy conventional and renewable energy investment remit focused on biomass, sources in this changing environment. geothermal, hydroelectric, solar or wind Mix power, or a combination of these assets more capital with fewer fund managers FUNDRAISING – has increased over recent years, with which are generally larger firms with the The fundraising market for unlisted energy $14bn and $13bn raised in 2015 and 2016 longest track records, as well as both vehicles is significantly larger than that respectively, above the average $8bn managers and investors seeing value in of all other natural resources strategies, raised annually in the preceding seven greater levels of diversification within their representing 69% of all natural resources years (Fig. 2). portfolios. Larger funds generally have a funds closed and 84% of aggregate capital broader investment mandate than smaller raised since 2008. However, advances However, the largest growth in energy vehicles, which has helped drive the in technology, investors’ scrutiny of fundraising comes from those vehicles growth in mixed energy fundraising. environmental policies and global trends following a mixed energy mandate. towards sustainable energy production Despite a decline in the number of mixed As one of the most developed regions for have resulted in changes to vehicles being energy funds reaching a final close alternatives and a major energy market, brought to market. Fund managers are in recent years, the amount of capital the vast majority of energy funds closed now eschewing private equity’s beginnings secured increased to $24bn in 2016 and since 2008 focus on investment in North in the energy industry – of investment in already stands at $19bn as at May 2017 America. However, as seen in Fig. 4, it is non-renewable energy assets – in favour of (Fig. 3). Much of this growth is the result mainly vehicles targeting conventional renewable energy sources. of investors increasingly looking to place energy assets or a mixture of non-

Fig. 1: Annual Unlisted Conventional Energy Fundraising, Fig. 2: Annual Unlisted Renewable Energy Fundraising, 2008 - 2017 YTD (As at April 2017) 2008 - 2017 YTD (As at April 2017)

50 40 45 45 34 41 35 40 39 38.1 31 30 35 33 32 32.0 26 26 25 30 22 22 26 27 21 21 25 22.3 20 19 20 19.6 21.0 20 17.9 18 15 13.6 13.8 12.6 14.0 15 10.0 10.3 10.1 10 8.7 8.3 9 10 6.0 6 5.1 4.8 5 4.2 5 1.9 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD YTD Year of Final Close Year of Final Close No. of Funds Closed Aggregate Capital Raised ($bn) No. of Funds Closed Aggregate Capital Raised ($bn) Source: Preqin Natural Resources Online Source: Preqin Natural Resources Online

2 Real Assets Spotlight | June 2017 © Preqin Ltd. 2017 / www.preqin.com CONVENTIONAL AND RENEWABLE ENERGY

renewable and renewable energy assets with fund managers seeming to shift to a resources mandate than renewable energy that lead to the region’s dominance in the renewable energy focus: renewable energy investors, a proxy for an institution’s level energy sector. funds represent 50% of capital targeted, of experience in the asset class (Fig. 6). compared with 40% for conventional As conventional energy investment is Contrastingly, renewable energy funds are energy funds. more established, institutions with such more geographically diverse than their a preference may have been in the asset non-renewable counterparts, with Europe- The majority (85%) of conventional energy class for longer and therefore allocate focused funds representing the largest funds in market target North America- through a distinct bucket. However, when proportion of funds closed since 2008, in focused assets, while the majority (56%) examining the assets under management part due to the EU’s Renewable Energy of renewable energy funds are targeting (AUM) of these two samples, institutions Directive which aims to have 20% of the Europe-focused assets. However, greater that include a preference for renewables bloc’s total energy output from renewable geographic diversification could be are typically larger: 36% of renewable sources by 2020. More Asia-focused seen in the near future as a result of the energy investors have more than $10bn in renewable energy funds have also closed Paris Agreement, ratified at the end of AUM, including 17% that hold more than than those with conventional and mixed 2016. Notably, with commitments from $50bn, compared with 28% and 11% of energy investment mandates. major energy markets in China and India conventional energy investors respectively. to mitigate greenhouse gas emissions’ FUNDRAISING OUTLOOK starting in 2020, Asia-focused fundraising As shown in Fig. 7, investors with a There are 140 unlisted energy funds in could represent a greater share of overall preference for conventional energy market as at April 2017, seeking $71bn in energy fundraising. investments have the largest appetite institutional capital commitments (Fig. 5). for midstream assets (63% of investors), Interestingly, the constituent funds appear INVESTORS although large proportions still seek more specialized in specific energy markets Conventional energy investors are downstream (45%) and upstream (52%) than historical fundraising trends suggest, more likely to have a separate natural assets. Also shown is the crossover

Fig. 3: Annual Unlisted Energy Fundraising with a Mixed Energy Fig. 4: Unlisted Energy Fundraising by Type and Primary Mandate, 2008 - 2017 YTD (As at April 2017) Geographic Focus, 2008 - 2017 YTD (As at April 2017)

25 100% 23.5 Diversified Multi- 90% Regional 19.3 Middle East & Israel 20 80% 16.9 16.0 70% Latin America 15 13.8 12.3 12 12 60% 11 11 Australasia 10 10.5 10 50% 10 9.6 9 9.1 8 Africa 6.3 40%

5 of Funds Proportion 30% Asia 3 2 20% Europe 0 10% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 North America YTD 0% Year of Final Close Conventional Renewable Mix No. of Funds Closed Aggregate Capital Raised ($bn) Energy Energy Source: Preqin Natural Resources Online Source: Preqin Natural Resources Online Fig. 6: Institutional Investors in Conventional vs. Renewable Fig. 5: Unlisted Energy Funds in Market by Type Energy by Source of Natural Resources Allocation 100% 100% 15 7.2 Other 90% 90%

80% 80% Mix Part of Infrastructure 70% 70% Allocation 73 35.2 60% Renewable 60% Part of Real Assets 50% Energy Allocation 50% 40% Conventional Part of Private Equity 40% Allocation Proportion Proportion of Total 30% Energy 30% Proportion of Investors Proportion General Alternatives 20% 52 28.7 20% Allocation 10% 10% Separate Natural 0% Resources Allocation No. of Funds Raising Aggregate Capital Targeted 0% ($bn) Conventional Energy Renewable Energy Source: Preqin Natural Resources Online Source: Preqin Natural Resources Online

3 Real Assets Spotlight | June 2017 © Preqin Ltd. 2017 / www.preqin.com CONVENTIONAL AND RENEWABLE ENERGY

between the two pools, with 52% of Fig. 7: Investment Preferences of Institutional Investors in Conventional vs. Renewable conventional energy investors also Energy 100% targeting renewables and 58% and 61% of 100% 93% 94% renewable energy investors targeting oil 90% and natural gas funds respectively. 80% 70% 63% 58% 61% 60% 50% 52% 52% FUND PERFORMANCE 45% 50% 43% 41% 44% Although renewable energy funds have 40% 36% been highly successful in raising capital 30% 20% from investors, over the longer term it 9% 11% 12% 10% 7% is conventional energy funds that have of Investors Proportion 0% trended towards higher returns, with a Oil median net IRR of 10.3% across all vintages, Coal Services Oil FieldOil

compared with 4.6% for renewables Uranium Upstream Midstream Natural Gas

(Fig. 8). Mixed energy funds, however, Renewables Downstream have also performed well, with a median Process/Stage Commodity net IRR similar to that of conventional Conventional Energy Renewable Energy energy funds (+9.1%), but a much smaller Source: Preqin Natural Resources Online dispersion of returns, with a top quartile IRR boundary of 13.0% and a bottom quartile IRR boundary of 4.4%. still technical challenges to overcome to in the sector to generate returns for their increase the competitiveness of renewable investors. What is certain is that global For vintages 2004 to 2014, the median net energy assets, as well as political discourse energy demand will continue to grow, IRRs of renewable energy and conventional that will shape the future of the entire particularly among emerging economies energy funds were relatively similar energy industry. Although the decision that are undertaking large-scale projects (4.6% and 5.9% respectively), although made by the US to withdraw from the to enhance living standards in their conventional energy funds had higher risk Paris Agreement poses a challenge for nations. To meet this demand, investment (Fig. 9). However, the best risk-adjusted the renewables industry in the US, the in energy-related projects, technology returns were generated by mixed energy continued commitments of other countries and companies will increase in both the funds, which had a median net IRR of to this agreement is likely to result in renewable and conventional energy 8.5% and lower risk than either renewable opportunities for fund managers and markets, creating opportunities for fund energy and conventional energy funds. investors targeting these regions. managers looking for investable assets and for institutional investors looking to deploy OUTLOOK In the short term, OPEC’s decision to curb capital. The future of the relationship between oil production should stabilize companies conventional and renewable energy operating in the conventional energy sources remains uncertain. There are industry, and help unlisted funds investing

Fig. 8: Median Net IRR and Quartile Boundaries of Unlisted Fig. 9: Risk/Return of Unlisted Energy Funds by Type Energy Funds (All Vintages) (Vintage 2004-2014)

25% 18%

20% Mix Top Quartile Net 15% IRR Boundary 16% Renewable x x Median Net IRR Energy 10% x Conventional 5% Bottom Quartile 14% Energy x Net IRR Boundary Net IRR since Inception Net IRR since

0% Deviation of Net IRR Risk - Standard

12% -5% 4% 6% 8% 10% Conventional Renewable Mix Energy Energy Return - Median Net IRR Source: Preqin Natural Resources Online Source: Preqin Natural Resources Online

4 Real Assets Spotlight | June 2017 © Preqin Ltd. 2017 / www.preqin.com Global private equity fundraising Capstone Partners (www.csplp.com) is a leading independent placement agent focused on raising capital for private equity, credit, real assets and infrastructure firms. The Capstone team includes 30 experienced professionals in North America, Europe and Asia.

Parquest Capital We congratulate the Parquest Capital team on the first and final closing of Parquest Capital II above its hard cap.

www.csplp.com

Americas — Europe — Middle East — Asia Pacific Securities placed through CSP Securities, LP Member FINRA/SIPC Authorised by FINMA INFRASTRUCTURE FUND LIFE SPANS INFRASTRUCTURE FUND LIFE SPANS Fund life spans vary considerably across asset classes, so using data from Preqin’s Infrastructure Online, we examine the trends within the infrastructure industry over the past eight years.

losed-end unlisted infrastructure funds The average life span of infrastructure AVERAGE FUND LIFE SPAN (YEARS) OF have the longest average life spans funds closed since 2009 is 13.9 years, FUNDS CLOSED SINCE 2009 C (AS AT MAY 2017) among private capital funds – longer life over two years longer than that of spans allow infrastructure funds to invest natural resources funds (11.3 years) and 13.9 in longer-term projects and help investors significantly longer than the average by providing steady returns with low figures for private equity (8.3), real estate 11.3 correlation to other asset classes which (7.3) and private debt (7.2) funds. The 8.3 can match investors’ long-term liabilities. figure has grown in recent years, with the 7.3 7.2 However, the market has considerable average life span for an infrastructure fund variety, with fund managers offering closed in 2015 at 15.8 years, up from 11.6 vehicles of different lengths to suit in 2009 (Fig. 1) – however, the average has asset types and investors’ requirements. since fallen to 12.9 years for funds closed In this article, we take a closer look at since 2016. infrastructure fund life spans using data from Preqin’s Infrastructure Online. Fund life spans vary considerably, as seen

in Fig. 2: almost half (47%) of unlisted Natural

AVERAGE LIFE SPAN (YEARS) OF Resources infrastructure funds closed since 2009 Real Estate FUNDS IN MARKET (AS AT MAY 2017) Debt Private Infrastructure have a life span of 10-12 years; 16% have Equity Private 12.6 12.1 terms of less than 10 years, and 14% have types of infrastructure projects, and those planned life spans of 25 years or more. investing in greenfield projects have the Participatiemaatschappij Vlaanderen longest average life span at 13.9 years 8.7 (PMV), for example, raised the €100mn (Fig. 3). Funds investing in brownfield and 6.8 6.6 PMF Infrastructure Fund, a fund with secondary-stage projects have average a 35-year life span which invests in life spans of 12.4 years and 12.3 years infrastructure projects in Belgium and respectively, suggesting that the greater the eurozone and held a final close in time required to construct and generate March 2013. More recently, France-based returns from new infrastructure projects fund manager Meridiam raised Meridiam may elongate the average life span of Infrastructure Europe III, a 25-year fund these vehicles.

Natural Natural investing in European public private Resources

Real Estate partnership (PPP) projects, which reached For long-dated and illiquid assets such Private Debt Private Infrastructure Private Equity Private a final close on €1.3bn in April 2016. as infrastructure projects, there may be Different funds often target different occasions when a fund’s life needs to be

Fig. 1: Average Life Span of Unlisted Infrastructure Funds Fig. 2: Unlisted Infrastructure Funds Closed since 2009 by Life Closed, 2009 - 2017 YTD (As at May 2017) Span (As at May 2017)

18 50% 47% 15.8 16 15.6 45% 14.1 14.0 14 13.3 12.9 40% 11.9 12 11.6 35% 10 30% 8 25% 6 20% 16% 13% 14% 4 of Funds Proportion 15% 10% 2 10% Average Fund Life Span (Years) Life Fund Average 0 5% 0% 2009 2010 2011 2012 2013 2014 2015 Less than 10 10-12 13-15 16-24 25 or More YTD 2016-2017 Year of Final Close Life Span (Years) Source: Preqin Infrastructure Online Source: Preqin Infrastructure Online

6 Real Assets Spotlight | June 2017 © Preqin Ltd. 2017 / www.preqin.com INFRASTRUCTURE FUND LIFE SPANS

extended in order to maximize returns and Fig. 3: Average Life Span of Unlisted Infrastructure Funds Closed since 2009 by Project find the best opportunity to sell assets. Stage Preference (As at May 2017) Among funds closed since 2009 that are 14 13.9 known to have a pre-agreed potential fund extension, over half (54%) have an extension period of two years, a further 37% have extensions of between three 13 and five years and 4% have a potential fund extension of over five years (Fig. 4). 12.4 12.3 The average life span for unlisted infrastructure funds currently in market is 12 12.6 years, which is lower than the average

since 2009 but still higher than all other Span (Years) Life Fund Average private capital fund types. As with funds closed, the largest proportion of funds 11 in market fall in the 10-12-year bracket, Greenfield Brownfield Secondary Stage but 22% plan to have a life of less than 10 Project Stage Preference Source: Preqin Infrastructure Online years and only 5% are targeting life spans of 25 years or more. Fig. 4: Life Span Extension for Unlisted Infrastructure Funds Closed since 2009 (As at May 2017) Despite the greater number of infrastructure funds in market with 60% shorter lives, fund managers are likely to 54% continue offering funds with differing fund 50% life spans to fit the assets available and the fund’s operating model. Stockholm- 40% based Infranode, for example, is currently raising Infranode I, a 25-year fund 30% primarily targeting small- and mid-sized infrastructure assets in the Nordics. The 20% fund held a second close on SEK 3.35bn 14% 14% in February 2017 and plans to hold a final 10% 9% close later in 2017, targeting SEK 4bn. with Extension of Funds Proportion 5% 4% With a wide range of investors currently targeting infrastructure, all with different 0% 1 2 3 4 5 More than 5 objectives, fund managers are likely to find appetite for both longer- and shorter- Life Span Extension (Years) Source: Preqin Infrastructure Online dated funds.

Fig. 5: Unlisted Infrastructure Funds Currently in Market by Life Span (As at May 2017)

DATA SOURCE: 50% 47% 45% Access comprehensive information 40% on over 500 infrastructure fund managers worldwide on Preqin’s 35% Infrastructure Online, including total 30% capital raised in the last 10 years, 25% estimated dry powder, number of 22% portfolio companies, investment 20% 15% preferences, direct contact of Funds Proportion 15% 12% information for key decision makers 10% and more. 5% 5% For more information, please visit: 0% Less than 10 10-12 13-15 16-24 25 or More www.preqin.com/infrastructure Life Span (Years) Source: Preqin Infrastructure Online

7 Real Assets Spotlight | June 2017 © Preqin Ltd. 2017 / www.preqin.com Preqin Solutions One Page Ad v7.pdf 1 16-Jan-17 2:25:12 PM

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In this month’s industry news, we examine Blackstone Group’s recently announced plans to raise the largest unlisted infrastructure fund to date, as well as wind power transactions, which have been on the rise in recent years.

BLACKSTONE ENTERS THE RECENT WIND POWER TRANSACTIONS INFRASTRUCTURE MARKET

In May 2017, Blackstone Group and Saudi Further explained on page 13, the number $8.3bn Arabia’s Public Investment Fund signed a of wind power deals has increased steadily Size of Global Infrastructure memorandum of understanding to create in recent years due to fund managers Partners II, which reached a final a new infrastructure fund to invest in US taking advantage of the opportunities in close in October 2012. infrastructure projects. With a target size of the sector: the number of deals completed $40bn, Blackstone Infrastructure I would during 2010-2016 increased from 234 to be the largest unlisted infrastructure fund 437. ever raised by a considerable margin; to date Global Infrastructure Partners III holds Although there have been fewer the record, closing on $15.8bn in January transactions in 2017 so far – with 122 deals 2017. Public Investment Fund, Saudi as at May – there has been some high- $14bn Arabia’s $183bn sovereign wealth fund, has profile deal activity. In May,Copenhagen Size of Brookfield Infrastructure agreed to commit $20bn to the pool, with Infrastructure Partners acquired three Fund III, which reached a final Blackstone Group looking to secure the wind power sites under development in close in July 2016. remaining amount from other investors. the Taiwan Strait for $5.97bn. The three wind farms are currently being developed Blackstone Group has previously raised by Fuhai Wind Corporation and have a the largest buyout fund closed to date total capacity of up to 1,500 MW. Another (Blackstone Capital Partners V, $20.4bn, notable deal was completed in December closed July 2006) as well as the largest 2016 when Allianz Global Investors private real estate fund (Blackstone acquired Hästhalla Wind Farm in Sweden, $15.8bn Real Estate Partners VIII, $15.8bn, closed a secondary-stage project, from Eolus Vind Size of Global Infrastructure September 2015) – and now looks for €6.5bn. Partners III, which closed in set to become manager of the largest January 2017. infrastructure fund as well. In doing so, it would join Global Infrastructure Partners and Brookfield Asset Management as one of the firms raising infrastructure mega funds in recent y ears. If it reaches its target size, Blackstone’s fund will be the third record-breaking raise since Brookfield Infrastructure Fund III ($14.0bn) in July 2016 and Global Infrastructure Partners III $40bn ($15.8bn) in January 2017. Target size of Blackstone Infrastructure I, the largest fund currently in market.

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9 Real Assets Spotlight | June 2017 © Preqin Ltd. 2017 / www.preqin.com CLAIM YOUR FREE COPY OF THE 2018 PREQIN PRIVATE CAPITAL COMPENSATION AND EMPLOYMENT REVIEW

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alternative assets. intelligent data. THE FACTS OVERVIEW OF THE AGRICULTURE INDUSTRY Using data from Preqin’s Natural Resources Online, we provide an overview of agriculture fundraising and the investment preferences of those active in the sector.

5% $13bn 224 of unlisted natural resources capital is being targeted by the 51 unlisted agriculture/farmland fund managers raised since 2008 has been secured by agriculture/farmland funds currently in globally are profiled on agriculture/farmland funds. market (as at March 2017). Natural Resources Online.

Fig. 1: Annual Unlisted Agriculture/Farmland Fundraising, Fig. 2: Unlisted Agriculture/Farmland Fundraising by Primary 2008 - 2017 YTD (As at March 2017) Geographic Focus, 2008 - 2017 YTD (As at March 2017)

25 100% Diversified Multi- 12 90% Regional 20 5.6 11 Sub-Saharan Africa 20 80% 17 No. of Funds 0.8 70% North America 15 14 Closed 31 13 13 60% 11 8.5 MENA 10 9 50% 4 Aggregate 40% Latin America Capital Raised 15 5 5 5.2 1.0

5 4.0 4.0 ($bn) Proportion of Total 30% 5 2.8 Europe 2.3 2.0 2.4 1.4 1 10 0.5 0.8 0.2 20% 0.7 0 1.7 Australasia 10% 20 2.4 2008 2009 2010 2011 2012 2013 2014 2015 2016 0% Asia No. of Funds Aggregate Capital 2017 YTD Year of Final Close Closed Raised ($bn) Source: Preqin Natural Resources Online Source: Preqin Natural Resources Online

Fig. 3: Strategies Targeted in the Next 12 Months by Natural Resources Investors Fig. 4: Investment Preferences of Agriculture/Farmland Investors 100% 80% 73% 69% 88% 69% 66% 67% 90% 70% 63% 80% 60% 55% 70% 50% 60% 40% 50% 30% 40% 20%

30% 25% 27% of Investors Proportion 10% 22% 20% 20% Proportion of Fund Searches of Fund Proportion 0% 10% 0% AgTech Owner Operator Livestock Agriculture/ Energy Metals & Timberland Water Operator Perennial/ Permanent Land Owner Farmland Mining Annual/Row Process/Stage Commodity Strategy Targeted Source: Preqin Natural Resources Online Source: Preqin Natural Resources Online

11 Real Assets Spotlight | June 2017 © Preqin Ltd. 2017 / www.preqin.com PREQIN GLOBAL DATA COVERAGE alternative assets. intelligent data.

FUNDS OPEN TO INVESTORS FUNDS WITH FIRMS FUNDS DEALS & EXITS ALTERNATIVES INVESTMENT MONITORED PERFORMANCE COVERAGE 27,284 49,361 19,882 14,399 25,374 279,736

PRIVATE NATURAL HEDGE FUNDS REAL ESTATE INFRASTRUCTURE PRIVATE DEBT EQUITY* RESOURCES 6,581 5,201 5,753 3,070 2,699 2,734 INVESTOR Active Active Active Active Active Active COVERAGE Private Equity Hedge Fund Real Estate Infrastructure Private Debt Natural Resources LPs Investors LPs LPs Investors Investors

FUND 17,439 24,138 6,434 1,148 2,304 1,653 COVERAGE Private Equity Hedge PE Real Estate Infrastructure Private Debt Natural Resources Funds Funds Funds Funds Funds Funds

FIRM 11,523 8,939 3,888 513 1,475 946 COVERAGE Private Equity Hedge Fund PE Real Estate Infrastructure Private Debt Natural Resources Firms Firms Firms Firms Firms Firms

PERFORMANCE 5,841 16,321 1,676 230 808 498 COVERAGE Private Equity Hedge PE Real Infrastructure Private Debt Natural Resources Funds Funds Estate Funds Funds Funds Funds

FUNDRAISING 1,954 16,773 1,086 269 306 376 COVERAGE Private Equity Hedge PE Real Infrastructure Private Debt Natural Resources Funds Funds Estate Funds Funds Funds Funds

BUYOUT VENTURE CAPITAL REAL ESTATE INFRASTRUCTURE DEALS & EXITS COVERAGE 80,464 135,415 37,056 26,801 Buyout Deals** and Exits Venture Capital Deals*** and Exits Real Estate Deals Infrastructure Deals

Alternatives Investment Consultants Funds Terms Coverage: Analysis Best Contacts: Carefully Selected from Coverage: Based on Data for Around our Database of over 562 16,286 400,821 Consultants Tracked Funds Contacts + PLUS THE PREQIN DIFFERENCE Comprehensive coverage of: + Over 250 research, support and development staff + Placement Agents + Dry Powder + Global presence - New York, London, Singapore, San Francisco, + Fund Administrators + Compensation Hong Kong and Manila + Law Firms + Plus much more... + Depth and quality of data from direct contact methods + Debt Providers + Unlimited data downloads + The most trusted name in alternative assets *Private equity includes buyout, growth, venture capital, turnaround, private equity fund of funds, private equity secondaries, direct secondaries, balanced, hybrid, hybrid fund of funds, PIPE, co-investment and co-investment multi-manager funds. **Buyout deals: Preqin tracks private equity-backed buyout deals globally, including LBOs, growth capital, public-to-private deals, and recapitalizations. Our coverage does not include private debt and mezzanine deals.

***Venture capital deals: Preqin tracks cash-for-equity investments by professional venture capital fi rms in companies globally across 2015 Annual CAIA Corporate all venture capital stages, from seed to expansion phase. The deals fi gures provided by Preqin are based on announced venture apitalc RecogniƟ on Award Winner rounds when the capital is committed to a company. As at 5th June 2017 THE FACTS WIND POWER DEALS

Using data from Preqin’s Infrastructure Online, we examine wind power deals by region and aggregate deal value, and look at the largest deals completed since 2016.

Fig. 1: Completed Wind Power Deals, 2009 - 2017 YTD Fig. 2: Completed Wind Power Deals by Region, 2009 - 2017 YTD (As at May 2017) (As at May 2017) 500 160 500 437 450 140 Aggregate Deal Value ($bn) 450 400 377 359 360 120 400 350 296 350 300 100 254 266 250 234 80 300 200 60 250 No. of Deals No. 150 122 200 40 of Deals No. 100 150 50 20 100 0 0 50 YTD 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 No. of Deals YTD Reported Aggregate Deal Value ($bn) 2009 2010 2011 2012 2013 2014 2015 2016 2017 Estimated Aggregate Deal Value ($bn) North America Europe Asia Latin America Australasia Africa Source: Preqin Infrastructure Online Source: Preqin Infrastructure Online

Fig. 3: Completed Wind Power Deals by Value Band, Fig. 4: Completed Wind Power Deals by Project Stage, 2009 - 2017 YTD (As at May 2017) 2009 - 2017 YTD (As at May 2017) 100% 100% 7% 3% 7% 7% 4% 4% 7% 17% 8% 5% 11% 90% 8% 6% 9% 17% 90% 10% 26% 30% 80% 4% 4% 34% $1bn or More 80% 39% 45% 40% 37% 5% 51% 52% 70% 41% 70% 41% 43% 39% 54% 31% 6% 67% Secondary 35% $500-999mn 5% 60% 60% 2% 4% Stage 3% 50% 54% 50% $100-499mn 5% 2% Brownfield 40% 40% 69% Proportion of DealsProportion 30% of DealsProportion 30% 63% 61% 58% 3% 53% Less than 52% 57% 45% 44% 45% 47% 49% 43% 45% Greenfield 20% 37% $100mn 20% 44% 25% 30% 10% 10% 0% 0% YTD 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Preqin Infrastructure Online Source: Preqin Infrastructure Online Fig. 5: 10 Largest Wind Power Deals Completed 2016-2017 YTD (As at May 2017) Asset Location Investor(s) Deal Size (bn) Stake (%) Deal Date Hästhalla Wind Farm Sweden Allianz Global Investors Capital 6.5 EUR 100 Dec-16 Taiwan Strait Wind Assets Taiwan Copenhagen Infrastructure Partners 6.0 USD 100 May-17 Baltic Srodkowy III Offshore Wind Farm Poland Kulczyk Investments 2.6 USD 100 Aug-16 940MW Vietnam Wind Project Vietnam Mainstream Renewable Power 2.2 USD - Nov-16 Race Bank Offshore Wind Farm UK Macquarie Infrastructure and Real Assets (MIRA) 1.6 GBP 50 Dec-16 ADEME, Deme Group, General Electric, InfraRed Merkur Wind Project Germany 1.6 EUR 100 Aug-16 Capital Partners, Partners Group Hokutaku Renewable Energy Service, J-Power, Hibikinada 229MW Offshore Wind Farm Japan Kyudenko Corporation, Kyushu Electric Power 175.0 JPY 100 Feb-17 Company, Saibu Gas LM Wind Power Assets Denmark GE Energy 1.5 USD 100 May-17 Kriegers Flak Wind Farm Denmark Vattenfall 1.3 EUR 100 Nov-16 Deutsche Bucht Offshore Wind Project Germany Northland Power 1.3 EUR 100 Mar-17 Source: Preqin Infrastructure Online

13 Real Assets Spotlight | June 2017 © Preqin Ltd. 2017 / www.preqin.com THE FACTS INVESTORS’ SOURCE OF ALLOCATION We look at how investors in infrastructure and natural resources allocate to the asset class.

Fig. 1: Institutional Investors in Infrastructure by Source of 33% Allocation of investors in infrastructure invest from a Separate Infrastructure Allocation separate allocation, compared with only 17% of 9% investors in natural resources. General Alternatives 33% Allocation 49% 21% of asset managers have a separate infrastructure Part of Private Equity allocation, while foundations are the least likely Allocation to do so. Part of Real Assets Allocation 15% 24% 13% of natural resources investors have a separate Other Allocation allocation to timberland. Source: Preqin Infrastructure Online Fig. 2: Institutional Investors’ Source of Infrastructure Allocation Fig. 3: Institutional Investors in Natural Resources by Source of by Investor Type Allocation 100% Other Allocation Separate Natural 90% Resources Allocation 13% 80% 17% 70% Part of Real Assets General Alternatives Allocation Allocation 60%

50% Part of Private Equity Part of Private Equity 10% 40% Allocation 22% Allocation 30% Proportion of Investors Proportion Part of Infrastructure 20% General Alternatives Allocation Allocation 10% 0% 22% Part of Real Assets 16% Allocation Asset Plan

Manager Other Allocation Company Insurance Public Foundation Endowment Pension Fund Pension Fund Private Sector Private Source: Preqin Infrastructure Online Source: Preqin Natural Resources Online

Fig. 4: Institutional Investors’ Source of Natural Resources Fig. 5: Institutional Investors’ Source of Natural Resources Allocation by Investor Type Allocation by Primary Strategy 100% 100% Other Allocation Other Allocation 90% 90% 80% 80% Part of Natural Part of Real Assets 70% 70% Resources Allocation Allocation 60% 60% Part of Real Assets 50% Part of Infrastructure 50% Allocation 40% Allocation 40% Part of Infrastructure 30% Proportion of Investors Proportion 30% Allocation Part of Private Equity of Investors Proportion 20% Allocation 20% Part of Private Equity 10% 10% Allocation 0% General Alternatives 0% Allocation General Alternatives Allocation Asset Water Plan Energy Mining

Manager Separate Natural Company Insurance Public Metals & Separate Allocation to Foundation Farmland Endowment Resources Allocation

Timberland Strategy Agriculture/ Pension Fund Pension Fund Private Sector Private Source: Preqin Natural Resources Online Source: Preqin Natural Resources Online

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