Starwood Energy Wraps $400M+ Fund

Energy industry proves worthwhile investment target in down economy; investors oversubscribe to PE package.

By JONATHAN MARINO

June 20, 2008

Starwood Energy Global Group closed a fund for $433 million to channel investments into energy and power sectors, it was announced Friday.

"The fund is the result of a focused business strategy that we have been pursuing in the extremely vibrant North American power generation and transmission sector for several years,” said Barry Sternlicht, Chairman and Chief Executive Officer of Starwood Capital.

The bulk of the fund, $250 million, has already been committed to generation and transmission assets in North America, according to the statement issued by Starwood Energy. Existing investments include power transmission lines being developed to serve the cities of Boston and New York, other transmission routes extending in Arizona and California and natural gas plants in Colorado and California. In its statement, the private equity firm said it will also pursue Greenfield developments when possible.

"On the development side, we are, in effect, delivering 'build to suit' assets for long term credit counterparty 'tenants,’” said Madison Grose, Starwood Energy’s vice chairman. “The high-quality nature of the cash flows in our projects has allowed us continued access to the debt capital markets in these turbulent times, while facilitating an investment thesis that seeks balanced returns between current yield and residual gains."

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