108 R

Transactions

JULY 2013

esonance Asset Management raises £35m for wind income fund

Legal advisor to the company: Legal advisor to the vendor: Tax advisor: Environmental due diligence provider: natural Power deal overview

Resonance Asset Management (“Resonance”), an alternative asset management firm, founded by industry veteran, nick Wood, has raised £35m in assets for its inaugural wind energy income fund.

With a distribution agreement in place via boutique investment bank, dexion Capital plc, initial commitments were raised from pension funds, insurance companies and family offices.

the fund, advised by Resonance, is ungeared and pays out all generated income to investors. Investors in the fund are seeking regular income that is linked to the price of wholesale electricity in the UK and the subsidies from the Renewable obligation regime.

the offering will consolidate the fragmented ownership of operating small and medium-sized wind farms in the UK with generating capacity of 2MW to 10MW, providing wind farm developers with an exit on their projects. this will enable them to reinvest in further new wind farm developments.

www.lawyer-monthly.com Advisor Insight

Perry Yam, head of private equity for Europe and the Middle East at Reed Smith, led the Reed Smith team on this transaction acting for Resonance. Reed

Smith is an international law firm which has 25 offices across the globe with 700 partners, 1700 lawyers. Here, Perry tells us more about the deal.

Could you tell me about your involvement in the deal?

Nick Wood, the founder of Resonance, has identified renewable as an attractive investment class going forward. We helped Nick and his team create the Resonance fund and, following its establishment, we acted for them with regards to the acquisition of its first investment.

Can you tell me about the main challenges that arose, if any, on this deal?

The main legal challenge was addressing the fact that the fund was acquiring an asset that was based in Scotland, because obviously a wind farm is a reliance on land, and the law in Scotland, particularly in relation to the land is distinct. There were some legal complexities which had to be negotiated. This challenge was overcome simply by using excellent negotiation skills.

Why would you say this was a good deal for all parties involved?

It is a good deal generally because it provides further support in the country for renewable energy, which is obviously part of the government’s initiative. It is good for Resonance having successfully raised the fund to have made the very attractive investment so soon after having established the fund. Also it is a good transaction for the vendors because they received an exit to allow them to utilise the proceeds from that sale for other strategic ideas and proposals that they have intentions for.

Is there anything else you would like to add?

I would like to highlight that this is further evidence of Reed Smith’s commitment to private equity in London and in particular across the three or four key sector focuses that the firm as a whole encourages.