Bain Capital announced a major investment into sustainable data centers in Europe on Wednesday. Under the terms of the deal, Bain will acquire an 80% of AQ Compute, the data center subsidiary of Aquila Group. The transaction will provide Bain with a footprint in renewable powered data center developments including two active projects in Spain and Italy.
“The European data center sector presents an attractive market opportunity, driven by robust cloud demand, a need for high-performance computing and AI deployments, and data sovereignty across the region,” said Ali Haroon, a partner at Bain Capital.
The Bain push into European markets for clean and renewable energy projects appears to be part of a larger trend of US-based private investment firms tilting their environmental portfolios towards friendlier jurisdictions.
According to S&P Global Market Intelligence data, the total invested by private equity in renewable electricity generation was $15 billion spread across over 100 transactions. Notably, the majority of these investments were in European projects, with the portion of capital committed to North American projects declining sharply from 2022.
Anecdotal evidence suggests that political pushback increasingly is causing U.S. institutional investors to pause renewable energy allocations. This comes at the same time that AI demand for electricity is poised to explode with Goldman Sachs projecting that data center power demand will grow 160% by 2030.
As AI increasingly dominates private technology investment narratives, there are signals that renewable and clean energy projects are having a more difficult time accessing capital. This downshift in sentiment arrives just as, increasingly, capital intensive hardware and infrastructure projects are coming on line.
Nowhere is the impact of AI on private equity more apparent than in demand for new fossil fuel capacity.
S&P data lists a total of 47 private equity investments in oil and gas companies in 2024 through mid-August with more than half in North America. At $7 billion, capital committed to these fossil fuel projects exceeded the total for full-year 2022.
While political tensions have caused many endowments, foundations to reconsider renewable allocations – an increasingly diverse investor mix – may tip the scale back in favor of transitional energy.
According to Pitchbook analysis, total assets under management in the private equity segment will reach $20 trillion by 2028. One of the fastest growing sources of capital for private investment funds are high-net-worth and mass affluent inventors. Currently, retail investors have few options to access private deals.
Both the Invesco Global Listed Private Equity ETF PSP and ProShares Global Listed Private Equity ETF hold portfolios that provide only indirect exposure via shares of publicly listed private equity managers themselves. That is likely to change in the coming years with several major firms exploring private market access through liquid — small investor friendly vehicles.
More stories we’re tracking at Equities:
LA sues soft drink giants over misleading green messaging
Los Angeles County charged Coca-Cola KO and PepsiCo PEP in a lawsuit filed Wednesday with misleading consumers about the environmental impact of the packaging of their products.
“PepsiCo and Coca-Cola—the top plastic polluters in the world—have littered the County of Los Angeles with their plastic bottles and engaged in a disinformation campaign to make consumers falsely believe that purchasing their products in single-use plastic bottles is an environmentally responsible choice,” the complaint states.
Jango Capital closes second African venture fund
African venture capital firm Janngo Capital announced the final closing of its second fund at $78 million on Wednesday, 20% beyond its initial target. Investors in the closing include the U.S. International Development Finance Corporation and Mastercard Foundation Africa Growth Fund. Janngo garnered headlines with the successful exit from Expensya through an acquisition by European “unicorn” Medius last year.
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