Voya Investment Management, the asset management business of Voya Financial, Inc, announced that its private credit platform completed the first close of a new infrastructure debt fund focused on project financing in the renewable energy space. With over $300 million in commitments, the first close comes on the heels of Voya IM’s hiring of Tom Emmons and Edward Levin, co-heads of Voya IM’s direct infrastructure team responsible for the origination, underwriting, structuring and management of mezzanine and stretch senior opportunities in renewable energy infrastructure projects.
“Since our arrival at Voya IM, we have found significant demand from sponsors for late-stage development financing, construction bridge loans and holding company debt,” said Emmons. “While demand for renewable energy infrastructure projects is growing, traditional sources of financing are more limited compared to the broader infrastructure category. We are thrilled to bring our expertise in renewable energy project financing to deliver our clients access to this growing asset class,” added Levin.
Voya IM has made three renewable energy infrastructure investments to date, including an agreement to provide $30 million in debt financing to Bakersfield Renewable Fuels to help retrofit a crude oil refinery to produce renewable diesel from soybean oil and other plant-based feedstock. Voya IM expects to make between 12 and 18 investments in the renewable energy project financing space, the vast majority of which are expected to be in the U.S. The firm expects that roughly half of these renewable investments will be focused on wind and solar projects, with the other half funding sustainable infrastructure projects such as battery storage and renewable fuels.
The addition of the renewable energy project financing team complements Voya IM's three decades of diversified infrastructure lending and represents a component in growing the firm’s broader $70+ billion (as of 3/31/21) private and alternative investments franchise.
“This is another compelling example of institutional investors’ continued confidence in Voya IM’s value proposition in the private and alternatives space,” said Charlie Shaffer, head of distribution. “Our platforms continue to distinguish themselves as having the breadth to access the full spectrum of deals while maintaining the discipline to remain selective. In today’s private markets where firms are raising bigger and bigger funds, our ability to be selective and participate only in deals that meet our standards is a feature of our platform that has really resonated with institutional investors.”
In addition to renewable energy project financing, Voya IM’s private and alternatives franchise includes over $70 billion across private placements, commercial mortgage loans, private equity, mortgage derivatives and leveraged credit. Over the last two years, Voya IM has also raised $1 billion of commingled assets in commercial mortgage loans, and over $450 million in commingled investments in investment grade private placements. Additionally, Voya IM manages secondary private equity via its affiliate Pomona Capital with $13.4 billion in capital commitments over its 25+ year history (all figures as of 3/31/21).
Earlier this year, the firm also announced the integration of Voya’s long-standing expertise across the areas of non-investment grade corporate credit, bringing together the teams responsible for U.S. and European broadly syndicated senior loans; U.S. and European public high-yield bonds; middle market loans/special situations; and CLO mezzanine and equity investments.
“Going forward, we believe the formation of our expanded leveraged credit group will allow us to increase our presence and overall activity in middle market lending and provide clients with differentiated product solutions in a space that has come to represent an increasingly important component of clients’ strategic allocations,” said Matt Toms, CFA, chief investment officer, fixed income.