Strategic Partners bets on renewables with Doughty Hanson

This is at least the third time the Blackstone secondaries unit has bought a stake in Doughty Hanson & Co. III, which has only one remaining investment.

Strategic Partners has acquired yet another stake in a tail-end Doughty Hanson fund, purchasing 50 percent of BNP Paribas‘s stake in Doughty Hanson & Co. III, according to a UK regulatory filing.

The sole remaining investment in Doughty Hanson & Co. III is Danish turbine manufacturer LM Wind Power, which is the world’s largest supplier of rotor blades for wind turbines, according to its website. Doughty Hanson invested in the company in 2001 through its Doughty Hanson & Co. III, a 1997-vintage $2.7 billion buyout fund, as well as through its Doughty Hanson & Co. V fund.

This is at least the third time the Blackstone secondaries unit has bought a stake in Doughty Hanson & Co. III, after the firm acquired Portfolio Advisors’s interest in the fund in June and Barcelona-based BMB Investment Management’s stake last year. The net internal rate of return (IRR) for Doughty Hanson & Co. III was 20 percent and the return on equity was 2.2 x as of 30 June, according to a spokesman for the firm.

London-based Doughty Hanson said in an April statement that it is looking to discontinue raising a new fund and instead is focusing on maximising the value of its portfolio companies, including LM Wind Power, to prepare for potential future exits. In 2002, only a year after acquiring the company, Doughty Hanson tried to take the company public, although it cancelled an initial public offering for the company, then known as LM Glasfiber.

“Over the past three decades, we have focused consistently on taking all steps necessary to achieve strong exits for our portfolio investments and we will now be more focused than ever on achieving that ambition,” chief executive Stephen Marquardt said in a statement at the time.

A spokeswoman for LM Wind Power recently told Secondaries Investor the company had not yet begun any sales process and that Doughty Hanson remains fully committed to the rotor blade manufacturer.

Earlier this month, Danish newspaper Berlingske Business reported that Danish banks and corporate finance advisers were preparing to secure a mandate to sell or list LM Wind Power. The paper cited US manufacturer TPI Composites as a potential buyer.

LM Wind Power, which had suffered from the financial crisis in Europe, bounced back to profit in the first quarter of this year, announcing net income of €7.2 million compared with a €15.2 million loss a year earlier.

Strategic Partners bought the interest through its Strategic Partners VI Investments fund, part of its Strategic Partners Fund VI that smashed its $3.5 billion target to close on $4.6 billion in October 2014 after a year of fundraising. The deal closed on 17 September.

Strategic Partners, Doughty Hanson and BNP Paribas didn’t return requests for comment.