By Keenan Skelly
Of DOW JONES PRIVATE EQUITY ANALYST
Wilbur Ross has made plenty of money investing in the U.S. coal
industry, and is taking that success overseas to China, but with a
focus on cleaner energy resources.
His firm, WL Ross & Co., is raising WLR China Energy
Infrastructure Fund, which has a $750 million target and will
invest in clean energy opportunities in China, including clean coal
technology and wind farms, according to two prospective
investors.
The fund will invest in existing infrastructure assets as well
as new, or "greenfield," opportunities.
A spokesman for Invesco Ltd. (IVZ), the parent company of WL
Ross, declined to comment.
As part of the initiative, WL Ross is partnering with the
Huaneng Group, the country's largest power producer by capacity.
Huaneng has an existing private equity relationship with Invesco, a
joint venture to invest in China's power generation sector.
"If you want to invest in China, you have to have a local
partner, so that is huge," said a prospective investor.
WLR China Energy Infrastructure Fund hasn't been immune to the
difficult private equity fund-raising environment. The fund delayed
a first close earlier this year, and though it is expected to hold
it this month, the amount is expected to be less than $100 million,
this investor said.
The fund also is seen as riskier and more focused than typical
energy or infrastructure funds.
"It's not clear yet that Chinese government wants to work with
public-private partnerships just yet," said a second prospective
investor. "Also, he [Wilbur Ross] has a track record in coal but
that's not clean energy. They will invest in clean coal technology,
but your average environmentalist might see that as an
oxymoron."
Still, WL Ross is likely banking that many investors will find
this fund attractive. California Public Employees' Retirement
System is conducting due diligence on the fund, said a person close
to the matter.
"The Chinese government wants to invest [over $100 million] each
year in clean energy from now until 2050 and they want to help
promote foreign investment to validate their growth initiative,"
said an infrastructure investor. "China can also guarantee 7% GDP
growth each year."
(Dow Jones Private Equity Analyst covers fund-raising and other
news of interest to the private equity community.)
- By Keenan Skelly, Private Equity Analyst;
keenan.skelly@dowjones.com