Marketable Renewable Energy

Long-only investing in marketable renewable energy & infrastructure companies globally

The portfolio management team has worked together continuously for approximately 12 years.

A defensive, yield-driven strategy focused on hard assets and stable infrastructure cash flows.

Avoids technology companies, manufacturers and asset-light businesses.

Invests in companies having a disproportionately positive impact on global CO2 emissions.

Strategy exhibits lower levels of volatility and correlation to broad equity markets.

Underappreciated Growth
High-growth renewable development businesses have several components to value

Operational/under-construction projects: assets in service generating energy and cash flow (or soon to be).
Backlog/awarded projects: a contract has been awarded, but some execution remains pre-construction (example: financing).
Project pipeline: land and grid availability secured, preliminary design done. Project available to bid into auctions/RFPs.

Mispriced Public Assets
Unique cash flow profile of some renewable power assets can be tricky for market to value

Renewable power assets have among the best long-term cash flow any infrastructure subsector.
Timing differences in long-term contracted cash flows and financing sources like amortizing project debt and tax equity can create unusual cash flow profiles to equity holders.
Debt refinancing, asset sales, tax equity flips, and other events can accelerate market recognition of this “hidden” value.

Private vs. Public Arbitrage
Often seeing a material difference in private and public valuations for renewable assets

Private infrastructure and pension investors have significant dry powder for investment, and are often willing to accept lower returns
This creates the opportunity for public companies to sell or “farm down” stakes in certain assets to recycle capital at a high multiple and reinvest it in new projects
These transactions can be very accretive to the selling developer, and help illuminate significant under-appreciated asset value in public companies.

M&A

Rapid sector growth and public market discounts generated significant transaction activity.

IPOs
We expect listed renewable infrastructure investment universe to grow further via IPOs

Still a large number of private mid-to-large scale wind and solar power developers that could choose to go public.
Recent IPO of leading renewable developer Neoen SA was well-received and should encourage others to follow.
Selected IPO investments can create opportunities for outperformance.
Kayne has a long history of active participation in energy infrastructure IPOs that meet our investment criteria.

PIPES/Private Capital
Kayne is a leader in private investments in listed infrastructure companies (PIPEs)

Sourced or structured over $15 billion of PIPEs/private transactions in 72deals since 2004.
Strong track record of private investment performance, augmenting returns for our listed infrastructure funds.
We will become a larger provider of private capital to the renewable infrastructure space as industry capital needs to grow.