With 4 previous funds notched on our belt, traversing the landscape ahead has become, while not routine, a mapped out and well-trodden pathway. During our previous offerings, we didn’t just leave bread crumbs along the way, we established waypoints and left clearly demarcated signage to find our way again. This overarching internal strategy lead to daily operational tactics, which streamlined our decision making, systematized our behaviors, and solidified our destination; impacting both the investment and energy space, through renewable energy real estate.
Investors in Fund 5 (F5) can expect a timeline for capital raise and deployment to closely match each other. We’ve invested energy networking with developers and working with their land acquisition teams, to be their first call as a land control “fixer”. This relationship of mutual trust, ensures our developer partners gain access to the land they need for their solar and wind projects, and that the fund has a mature and robust deal-flow.
We have initiated an expansive land lease buyout campaign, to diversify the fund acquisitions into ultra low risk, already operational wind and solar projects. This supplemental strategy, allows the fund to own land within many projects, diversifying our environmental impact and spreading out our risk. The objective of this campaign is two fold; primarily this allows us to quickly identify and acquire cash-flowing assets for the fund, but secondarily this results in more liquidity within the renewable energy real estate marketplace. This enhanced liquidity is a positive for one-off landowners, and perhaps more importantly, higher market liquidity is a long play for us in the industry, that may allow an exit for the funds 10, 20 or 30 years down the line.
The capital raise period is expected to shorten considerably, as we are opening the fund with pre-commitments of $1.5M. The remaining $3.5 million will come in from investors within our previous offerings, as well as new clients locally or nationally, and participants of the Sustainable, Responsible, Impact (SRI) conference in Colorado, where we host a booth. The fund aims to raise all the capital within 9-12 months, and have the money working within new and operational projects by the fall of 2019. The early shares are discounted, to entice investment early on. We expect the first of the quarterly payments to begin within 6-9 months, and to continue in perpetuity. The fund, as our track record supports, targets an investor net IRR of 9-11%.
The fund will also be targeting early stage solar developments in Oregon, as this new burgeoning market is ripe for investment. This appetite for local land holdings is a function of interest both internally, and from our many Pacific Northwest investors.
At the larger $5M investment scale, F5 is poised to meet and exceed our previous offerings SRI considerations. Every $100K invested displaces 400+ tons of carbon annually, enough to displace 86 cars driving all year, which in fund total is 20,000 tons, or 4300 cars! The same $100K converts 41 houses to clean renewable energy, for a fund total of 2000+ average houses. The fund’s $5M total investment will on average create 12.5 jobs. These jobs are solid middle class positions, paying an average salary of $68k per year.
Cashflow and Impact! We are excited for all the new investments in the renewable energy industry, and we hope our new investors feel the same. We invite forward thinking investors to Thrive Through Renewables.