FIEE launches €175m second fund

The fund expects to hold a first close on €100m by June, the GP told Unquote.

Fondo Italiano per l'Efficienza Energetica II targets a net IRR of 10-12% and an annual cash yield of 5-6%.

FIEE is an Italian private equity firm dedicated to the energy efficiency and renewable sectors. It is managed by a team led by co-CEOs Raffaele Mellone and Andrea Marano, alongside president Fulvio Conti.

Its debut vehicle, FIEE I, was launched with a €150m target in 2016 and held a final close on €166m in 2017. The fund recently inked its last deal, by investing in Cremonesi, and is now fully deployed.

FIEE founder and co-CEO Mellone told Unquote: "We didn't want to increase the fund size significantly because we prefer to manage a smaller vehicle and focus on supporting the growth and expansion of our companies. We managed to deploy our debut fund very quickly. We expect to invest this second vehicle at the same fast pace and subsequently raise our third fund."

Investors
FIEE expects most of the investors from its debut fund to re-up to this new vehicle. The European Investment Bank (EIB) has already committed €40m to the fund.

In addition, the vehicle intends to build an investor base composed of Italian insurance companies, banks, asset managers and bank foundations. While its inaugural fund only comprised Italian investors, the GP plans to attract a number of international LPs to this new fund.

"We are building a solid and large investor base," said Mellone. "The coronavirus emergency has made investors more cautious and careful in their allocation decisions, but LPs can see that the companies in our portfolio are truly resilient and anticyclical, and have been able to react quickly and efficiently to the current shock. In the last few months, our portfolio companies were able to continue to generate the same volume of revenues and often even increase their turnover."

Investments
FIEE II intends to invest in companies generating revenues of €2-15m, with high-growth potential. It will target businesses operating in the energy efficiency, renewables, lighting, cogeneration, pollution control, smart city, smart parking and smart mobility sectors.

The fund will invest around 80% of its capital in Italy, while 20% will be deployed in the rest of Europe. It will provide tickets of €10-35m, with a sweet spot of €25m.

The fund already has four deals in its pipeline, which it expects to close by the end of the year.

People
Fondo Italiano per l'Efficienza Energetica – Raffaele Mellone, Andrea Marano (co-CEOs).

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