Credit Suisse spinoff Energy Infrastructure Partners has invested half a billion euros in a renewable energy platform based in Germany. The deal puts the Swiss investment firm on a par with European electricity giants.

Energy Infrastructure Partners (EIP) received the go-ahead from Swiss regulator Finma on December 1 – a little more than a week ago – giving EIP the required license to act as an independent investment manager. With the receipt of the license, the energy infrastructure spinoff shed the acronym of Credit Suisse (CS) from its name, retaining the interests of the bank as a minority shareholder.

The change in set-up didn't stop EIP from concluding a mega-deal. The company, led by the partners Roland Doerig and Dominik Bollier, invested 530 million euros ($643 million) of client assets in the shape of equity in Baywa r.e., a global platform for renewable energy.

A One Year Pre-Engagement

Doerig told finews.com in an interview that the transaction had followed a 12-month pre-engagement phase. With the acquisition of the minority 49-percent stake, EIP will also get the right to fill three seats on the six-member board of directors.

The purchase in Munich is a huge transaction for the company that today has 40 members of staff and 3 billion Swiss francs ($3.4 billion) in assets under management. With the one deal, EIP takes the step from being an investment firm in Zurich to a major shareholder in a global industry leader, which engages in the design, construction and operation of solar power stations and wind farms.

Baywa r.e. was launched a decade ago by Baywa, the listed Bavarian agro-trading company. The deal announced by EIP is the biggest transaction in the history of Bayra, which was founded in 1923. The energy unit has about 2,400 staff across 27 branches worldwide and generates sales of about 2 billion euros in 2019.

In for the Long Term

The company is planning, designing and building wind farms and solar power stations and also provides the service for the up-and-running infrastructure. It has a unit that buys and sells spare parts and components for the renewable energy industry – 60 percent of all solar panels installed in Switzerland have been provided by the Bavarian firm.

Bayra r.e. will use the money from the capital increase to further globalize its business. It was looking for investors across the globe and it may come as a surprise that EIP was successful with its bid. Doerig said that the firm prevailed over other bidders thanks to the long-term perspective inherent to the EIP funds – they have an inbuilt timeframe of 25 to 30 years, which compares with the five to seven years typical for private equity vehicles.

From Designer to Provider

EIP also scored with its idea to not only build renewable energy infrastructure for third party buyers but also to take ownership of such plants going forward. As a first step, the company plans to take 3 gigawatts of wind and solar energy production capacity onto its books. This will partly shift its role of being a developer of infrastructure to being an owner, helping it to profit from the sale of the electricity, which will provide a steady cash flow to Bayra r.e.

It was the same idea that EIP used to get Swiss pension funds to invest in CSA, an investment boutique owned by Credit Suisse pension fund and managed by Doerig & Co. The fund manages 1.7 billion francs in Swiss pension rights and invests in domestic energy infrastructure.

It was also the concept behind CSA's quest to become a major shareholder of Alpiq and Swissgrid.

Among Giants

It is the retirement money of Swiss employees that is being used to finance the expansion of Baywa r.e., together with assets provided by foreign institutional investors. EIP, whose funds are engaged in constructing the biggest European wind farm in Norway, is now not only a major player in Alpiq but also in Baywa r.e. and thus is a strong voice among the European energy giants.

The company will also position itself closer to the mighty wealth managers UBS and CS by relocating to Paradeplatz, the famed heart of Swiss banking situated between the main railway station of Zurich and the lake.