Careful money buys up Spruce Finance

As solar grows rapidly into a mainstream energy source, more conservative investors are deciding that they want in on the action. We could cite any one of a number of indicators here, including U.S. insurance companies and Danish pension funds buying solar projects, portfolios or higher ratings on these portfolios from bond agencies, and asset managers buying up solar and wind yieldcos.

But while the focus of much of the capital flowing into the industry has shifted from renewable energy companies to assets, companies are also getting purchased, and it is a sort of two for one if those companies are originating and holding portfolios of assets.

A little more than a year after investing $25 million in Spruce Finance, Highbridge Principal Strategies (HPS) Investment Partners has bought the third party solar company outright.

HPS was part of JP Morgan’s capital management before it spun off, and now has $46 billion in assets under management. This is no flashy venture capital investor, and presents itself as a global firm that focuses on credit and “longer-dated less liquid investment opportunities”.

Along with this board co-chair Christian Fong has been appointed as CEO. Fong also serves on the board of TerraForm Power, and brings substantial clean energy finance experience as the co-founder of Renewable Energy Trust Capital, where he led the acquisition and development of more than a billion dollars worth of wind and solar.

This acquisition comes a year and a half after Spruce went through a rough period, with substantial layoffs, executives leaving (some of whom have gone on to lead major clean energy trade organizations) and a selling off of portfolios, during a period of residential solar market downturn.

Yet Spruce Finance did not fall apart entirely, and in the first half of 2018 was still the nation’s sixth-largest third-party solar provider, according to Wood Mackenzie Power & Renewables.