Renewable Energy Tops The Poll For Private Equity Managers

Private equity sponsors say that clean energy is the sector in which they expect to increase their activity the most in 2007.

According to a survey of 300 UK based but internationally active fund managers, co-sponsored by law firm Simmons & Simmons and Société Générale Corporate & Investment Banking, "alternative energy" pipped other fashionable areas such as infrastructure.

Alistair Bird, a partner from Simmons & Simmons, said: "Our firm is involved in advising on an increasing number of renewable energy projects. My only note of caution is that there have to be financially viable projects before private equity investors can get involved, so it may take longer than this year before the big increase in investment can happen."

The report said that there is growing interest in new energy from private equity limited partners, with DFJ Element, a US venture capital fund, raising a USD 284m fund last year, nearly double its initial target.

The same survey found that private equity managers think 2007 may not be as good a year for their industry as 2006, with "returns set to level out to trend down" in the face of a more difficult economic environment.

By: New Energy Finance

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