Alinda Fund III makes first exit

Alinda Capital Partners, an independent fund manager focused on mid-market core-plus infrastructure investments in North America and Europe, has sold Alinda Infrastructure Fund III’s interest in Energy Assets Group Limited in the United Kingdom to a consortium comprising European institutional investors and an infrastructure fund. 

This is the first exit for Fund III. 

As part of the sale, an Alinda-managed co-investment vehicle also exited the company, as did a minority shareholder which was a vehicle of Hermes Infrastructure, so that the buyers acquired 100 per cent of Energy Assets. 

Headquartered in Livingston, Scotland, Energy Assets is the largest independent provider of industrial and commercial gas metering services in the United Kingdom by number of meters owned and managed, and is a provider of multi-utility network metering and data services. 

Alinda led the take-private acquisition of Energy Assets for GBP286 million in July 2016 and led the sale for GBP612 million in April 2020. 

Alinda Chairman Chris Beale and Managing Partners Andrew Bishop and Jim Metcalfe each made statements. 

“We were attracted to Energy Assets’s strong team and its contracted cash flows that provide a floor on the downside,” says Metcalfe. “We made a good sector call. We were a relatively early entrant into the metering sector and, after we made the investment, transaction multiples increased in the sector. New entrants have been willing to pay a premium for platforms with contracted cash flows and demonstrated growth.” 

Bishop adds: “Our investment thesis was borne out. The Energy Asset’s team acquired additional portfolios of contracted meters, boosting EBITDA substantially. The increase in EBITDA combined with the increase in transaction multiples enabled us to deliver superior returns for our investors. It is a testament to Energy Assets and its team that the company has proven to be very resilient in these uncertain times.” 

Beale says: “Regulatory risk is a rising concern for infrastructure investors. Investing in meters under long term contracts with utilities, rather than in the utilities themselves, was a smart way to gain exposure to utilities without taking regulatory risk on our equity return. Energy Assets exemplifies how we approach investing in utility-related infrastructure.” 

Alinda was advised by Evercore and Linklaters.