The new vehicle follows several years of direct renewables investing via its secondary strategies.

Stafford Capital Partners back in 2012 saw an opportunity to make its first move into a sector that at the time was relatively new for investors: the infrastructure secondary market.

At the time it was developing its first fund of fund strategy but also saw an opportunity in buying existing stakes in funds.

It led to the firm buying that year Macquarie’s nascent infrastructure secondary strategy, including a EUR 40m portfolio of investments, and a small team led by William Greene, now a managing partner at Stafford’s infrastructure business, says chief executive officer Angus Whiteley.

The acquisition became the foundation for Stafford’s infrastructure platform, which has since grown into a global specialist in acquiring and managing stakes in mature infrastructure funds, and now manages more than EUR 2.7bn across secondaries and renewable investments.

Stafford’s Funds

Roll forward to today and Stafford, is preparing to take a renewables strategy it has until now backed with its own fund capital to outside investors.

While the firm is best known for buying stakes in mature infrastructure funds, it has for several years also deployed capital from its infrastructure secondaries vehicles into operating renewables through a platform called Theia, a structure it used to source and manage direct investments alongside its core secondaries business.

Theia I and Theia II, vehicles launched in 2018 and 2022, were wholly owned and funded by Stafford Infrastructure Secondaries Funds II and IV, with no external investors, and focused on acquiring and optimising operating European renewables assets – including two Dutch solar parks acquired from a subsidiary of Irish energy company Alternus Clean Energy.

Theia

Stafford registered Stafford Theia Accelerated Repowering III in August, according to public filings, and plans to raise third-party capital for the vehicle, a shift it says will “institutionalise” the Theia strategy.

“This will be the first time we’re taking that strategy out to institutional investors,” Whiteley says, in contrast to previous Theia vehicles that were owned by Stafford’s secondary funds that also made other investments.

The manager said it has “integrated” Ganapali Consulting, the adviser to the Theia platform, bringing the 11-person Milan and Zurich-based team led by managing partner Angelo Prete into the firm, taking total headcount to 22, split evenly between infrastructure secondaries and repowering.

Theia III is intended to invest directly in renewable assets, rather than buying interests in funds, and Stafford says it is not a continuation vehicle that rolls up assets from Theia I and II.

Instead, the firm describes it as a dedicated European “revamping and repowering” strategy, targeting operational wind and solar projects where new capital can be deployed post-acquisition to lift capacity and performance.

Stafford says the vehicle, which targets 12%-15% net IRR, will typically look to acquire ageing solar PV and wind assets in markets including Italy, the UK and the Netherlands, where it sees scope to upgrade equipment and capture a “compelling” risk-return profile for institutional investors.

The repowering strategy will look to focus on acquiring operational European wind and solar assets and investing new capital to upgrade or replace older equipment. “It’s a repowering strategy, and it will focus on solar and wind, specifically,” says Whiteley.

“Our focus is around Europe, and our experience is around Europe in particular, albeit we’ve got a wider experience base and a much more global one.” The approach aims to capture higher output from existing projects without the land, permitting or grid-connection risks and challenges associated with greenfield development.

“Repowering is the next logical evolution of what we already do,” Whiteley says. “It combines the stability of brownfield assets with the growth potential of new capex. It’s not a new direction for us; it’s the same DNA applied to a new opportunity.”

The idea is to acquire renewable projects that were developed a decade or more ago, replace older equipment with modern technology and new capex, and capture higher output without the land, permitting or grid-connection risks that accompany greenfield projects.

“The ability to buy existing infrastructure and put new capex to work by updating that infrastructure and getting much greater output, we believe, is a really compelling way of generating new renewable energy and supporting the global energy transition” he says.

Some of Stafford’s commitments

Whiteley estimates that LP-led and GP-led transactions now each account for about USD 15bn-USD 20bn of annual volume, with the GP-led side dominated by single-asset continuation vehicles in sectors such as digital infrastructure, renewables and transport.

For Stafford, integrating Theia and taking a repowering strategy to third-party LPs marks a shift from buying fund stakes to building a direct renewables capability, an attempt to institutionalise a strategy it has so far backed with its own capital, while keeping secondaries as the core of the business.