#None #Avenue Capital #Partners Group #California Energy

Avenue Capital Group Finalizes Sale of Energy Transition Assets

Avenue Capital Group has successfully completed the sale of a substantial portfolio focusing on energy transition assets located in California. The deal, valued at $2.2 billion, involved the transfer of assets from its Avenue Golden Continuation Fund, L.P. (known as Avenue Golden Fund) to Partners Group, a global private markets investment manager. This transaction is a notable highlight in the ongoing shift towards cleaner energy solutions.

The sold portfolio comprises 11 natural gas-fired power plants that Avenue has been managing since 2016. Recognizing the urgent need for energy transformation, Avenue established the $625 million Avenue Golden Fund in 2022 to extend its stewardship of these plants. This fund was initiated to shift asset management strategies away from traditional methods, emphasizing a more sustainable and contracted approach to energy production.

Avenue's energy transition strategy involved the implementation of battery energy storage systems (BESS) at the existing plants. The incorporation of these systems enabled the conversion of traditional energy plants into hybrid energy centers, capable of storing energy and discharging it during peak demand. This strategic pivot was integral in minimizing the carbon footprint and opening avenues for long-term contracts, reflecting the company's commitment to sustainable energy practices.

According to Craig Hart, Senior Portfolio Manager for the Avenue Golden Fund, the transition towards a dedicated energy business has been a rewarding venture. He stated, "It has been gratifying to develop a purpose-built energy transition business that delivers reliable, affordable, and lower carbon power to support the ongoing, multi-decade energy transition." Hart expressed optimism about continuing to enhance power investments in the evolving U.S. power markets, illustrating Avenue's commitment to its sustainability goals.

Marc Lasry, the Chairman and CEO of Avenue Capital Group, praised the efforts of Craig Hart and his team, highlighting the exceptional outcomes for Avenue's investors. He expressed excitement over the anticipated launch of a new energy transition fund later this year, which promises to build on the success of the Avenue Golden Fund.

The operational management of the sold assets was conducted by Middle River Power, a company formed by Avenue in 2016, specializing in power sector investments and asset management services. As part of the transaction, Middle River Power was also acquired by Partners Group, indicating a significant consolidation in the energy sector.

Financial advisory for Avenue during this transaction was provided by Guggenheim Securities and Morgan Stanley & Co. LLC, while Latham & Watkins served as legal counsel. This alliance among high-profile advisors underscores the strategic significance of this deal in the energy market.

Avenue Capital Group, founded in 1995 by Marc Lasry and Sonia Gardner, is internationally recognized for its emphasis on strategic credit and alternative investments across various markets, including the U.S., Europe, and Asia. With assets under management exceeding $11 billion, Avenue capitalizes on the expertise of over 60 investment professionals, further enhancing its position within the energy transition movement.

As the energy landscape continues to evolve, Avenue's actions reflect a substantial commitment to sustainable, clean energy initiatives that not only promise financial returns but also contribute to global environmental goals. This transaction is a clear demonstration of how private investment can drive positive change in energy practices.