French alternative energy fund manager RGreen Invest is approaching a February final close on its latest mezzanine debt and equity fund – InfraGreen III – above target and approaching an extended hard cap.

InfraGreen III has raised EUR307million (US$352million) as of December (2018) and is around 75% deployed. It is the fourth fund vehicle under management for RGreen Invest, which partners with developers at the ready-to-build stage. The vehicle is structured as a closed-ended, private fund. It has a 10-year primary term, with two extension options of one year. The expected average duration for junior debt deals is five to seven years, and for equity between five to 10 years. The target net IRR is 8% and the target yield 5% after the investment period has ended.

While mezzanine debt investments have been the mainstay for its fund suite to date, RGreen Invest will allocate a significant portion of the capital to equity investments. The manager is also increasingly branching out to renewable energy technologies beyond wind and solar, such as biomass, biogas, geothermal and energy storage.

With InfraGreen III now around 75% deployed, the fundraising for the successor lnfraGreen IV could start in mid-2019. The fundraising process is due to expand outward and to target LPs outside of France, maybe as much as 30% of the investor base. The assets of the InfraGreen III fund so far include:

• a quasi-equity investment in French geothermal with developer Kyotherm
• an equity investment in the Goya wind farm cluster in Zaragoza,Spain
• a quasi-equity investment in Italian wind, solarand biomass in Belenergia
• a quasi-equity investment in solar in France with Arkolia

For InfraGreen III, there is now a much more significant allocation to equity investments (30-40%) whereas predecessor funds were purely focused on mezzanine debt.