US-based venture capital firm Braemar Energy Ventures has closed its third fund at the maximum amount of $300m with commitments from several strategic investors from the energy industry, including the utility AEP (American Electric Power) and several multinational energy companies from Asia and the Middle East.
It is the first disclosed indirect corporate venturing commitment by AEP. Its spokesman said by email: “To the best of our knowledge this commitment to Braemar Energy Ventures is American Electric Power’s first fund commitment. Over the years AEP has made direct investments in start-ups with, at best, mixed results. We’re a large utility, not a venture capital firm, so identifying and nurturing energy-related start-ups isn’t necessarily a core competency.
“Our chief operating officer, Bob Powers, serves on an advisory board for Braemar and our investment provides us an opportunity to monitor potentially attractive technology developments identified by Braemar’s experts. This access to developing technologies should help AEP identify the ones with potential to be game changers and either be an early adopter or adapt our business to prepare for the impact of the technology.
“Our investment with Braemar also provides us with the potential to do separate direct investments in start-ups that we find particularly attractive.”
Braemar Energy Ventures III will invest in venture and expansion-stage energy technology companies that serve the conventional and alternative energy markets. Dennis Costello, managing partner of Braemar, said: “Energy efficiency continues to be a major theme in the new fund with technology ranging from utility-scale solutions down to managing power and fuel consumption at the device level.”
The fund was oversubscribed and closed at an amount that is higher than Braemar’s $250m second fund.
As well as strategic limited partners, the third fund had institutions investors including MassMutual, Alpinvest Partners, Morgan Stanley Alternative Investments, Macquarie, GIC Special Investments — the Government of Singapore, Munich Re, HarbourVest, the State of Rhode Island, RIT (Rothschild Investment Trust) and Invesco on behalf of the California State Teachers’ Retirement System (CalSTRS).