CBRE Investment Management (CBRE IM) has acquired ClearGen Holdings, an investor in distributed energy projects, from Blackstone’s credit arm, executives at CBRE IM and ClearGen told Infralogic.  

The deal, the terms of which were not revealed, will give funds managed by CBRE IM a full stake in the Charlotte-based firm. The acquisition, which closed 15 August, will help ClearGen accelerate its growth, both sides said.

“We’ve been looking in the distributed generation space for a few years now,” Robert Shaw, Managing Director, Private Infrastructure Strategies at CBRE IM, told Infralogic. “What we liked about the ClearGen opportunity is that it is a nimble team that is well-positioned to really manage a distributed asset base. It has a long track record doing it. They are self-sufficient in paying their SG&A [Selling, General & Administrative Expenses], so you don’t have to walk in Day One and worry about whether the pipeline will show up, because they’ve built a very well-run efficient business.”

Marathon Capital acted as sellside financial advisor, while Deloitte served as financial and tax advisor to CBRE IM, Shaw said. White & Case acted as legal advisor to Blackstone; Morgan Lewis served as CBRE IM’s legal advisor.

The investment was made from CBRE Global Infrastructure Fund.

Backstory

Launched in 2020 with backing from Blackstone Credit, ClearGen partners with developers to provide financing for portfolios of assets.

“Often times, we are investing at notice-to-proceed and fully financing a project from the first work done on site through completion,” ClearGen CEO Rob Howard explained. “Then we own it either outright, or in a preferred equity portfolio with a given partner.”

Howard, who joined ClearGen as CEO in Spring 2021, said that CBRE was an apt partner for the firm as an open-ended fund sponsor.

“That is very well suited for these long-term investments that we are making,” Howard said. “For us to be able to say to our partners, ‘We are in this for the long haul, we are going to continue to work with you and get the most out of these assets and keep your customers happy.’”

Ted Brandt, CEO of Marathon Capital, said that “the entrance of investment managers affiliated with real estate servicing firms into the energy and infrastructure markets is a welcome development, especially for distributed generation.”

“We really feel like we found the absolute right buyer for ClearGen and their employees,” Brandt said.

ClearGen’s leadership team will remain in place post-transaction, with the company looking to expand its team out of its North Carolina headquarters.

Blackstone Credit declined to comment. Deloitte, White & Case, and Morgan Lewis did not respond to requests for comment.

Expanding opportunity set

ClearGen has a portfolio of more than 250 distributed energy projects across 14 states. The firm’s portfolio consists of many solar assets, Howard said, as well as microgrids and some energy efficiency-as-a-service projects.

CBRE’s access to real estate markets could open additional opportunities for ClearGen, Howard said, spurring the firm to look at options such as electric vehicle fleet charging.

ClearGen will also look at potential growth through M&A activity, Howard said.

“While we greatly value the organic reliability of a forward flow partnership, we have closed acquisitions before and will continue to run at the right opportunities,” he noted.

CBRE IM could also explore buying additional DG companies if there were opportunities for synergies with ClearGen.

“We are really focused on having disciplined growth,” Shaw added.

ClearGen has traditionally owned assets in construction through operations, but might be willing to explore earlier stage opportunities, according to Howard.

“We have not historically invested in development stage assets, but it is something that we could consider,” he said.

CBRE previously had a joint venture (JV) with Amp Solar Group, now called Amp Energy. CBRE divested the US assets from the JV in 2023, Shaw said, and the firm has been looking for the right opportunity in the US DG space for the past few years.

“2022 was a year that there were some really strong valuations and we were having difficulty finding the opportunity to reinvest back into this space,” Shaw said. “We’ve always liked this space, but I think now is really an opportunity where there is obviously a little bit of uncertainty that has been inserted into the market, and I think it’s a good time for us to get involved.”