A new joint venture has launched out of Dallas that aims to acquire real estate and royalty interests—specifically those associated with renewable energy—across the U.S.
The business, founded by local real asset platform Accelerate Real Asset Management, will invest in infrastructure associated with utility-scale solar, wind, and energy storage facilities. Under the name Activate Renewables, the team plans to focus on the acquisition of real property interests directly from landowners. That will enable it to provide creative capital solutions for developers looking for a differentiated and low-cost source of financing.
Accelerate Resources, Accelerate Real Asset Management’s legacy line of business, will manage, develop, and execute Activate’s business plan with the support of investment firm Pine Brook Partners. Activate has already secured an initial capital investment of $500 million from an undisclosed institutional investor to begin investing in renewable energy infrastructure.
“We’re excited to expand our successful investing blueprint into powering the new economy,” Brennan Potts, CEO of Accelerate, said in a statement. “Activate is well positioned to deliver differentiated results and we’re confident in our ability to offer an attractive cost of capital to landowners and renewable energy developers.”
Potts founded Accelerate in 2015 and began operations in 2016. Since then, his core business has been based on aggregating fractional, non-operated investments in oil and natural gas assets into a diversified, cash-flowing portfolio. Potts himself has raised more than $1 billion in financing for transactions related to 50,000 acres of oil and gas acquisitions.
Those assets include oil and natural gas lease and wellhead investments, as well as mineral rights.
Founder identified a market dislocation
Potts got to where he is today by identifying a “dislocation in the oil and gas market.” According to the entrepreneur, small, fractional ownership interests were overlooked by the industry at large. He saw an opportunity to aggregate them into a large, cash-flowing, diversified portfolio of scale, and built a tech platform that Accelerate could introduce to a largely antiquated industry.
Accelerate’s technology- and data-driven process can identify, acquire, and manage financial-oriented assets on behalf of institutional investors. This makes for better, faster, and smarter decisions being made, according to the team.
The team credited the same process for helping to get Activate Renewables off the ground so quickly.
“It is our opinion that we can capture attractive, risk-adjusted returns in an emerging asset class of sustainable infrastructure royalties, just as we’ve done with our legacy investments,” Gayle Goodman, Accelerate’s communications consultant, told Dallas Innovates. “We believe a significant renewable transformation is occurring in the United States economy.”
Leveraging a new economy
The Accelerate team believes a new economy has emerged in recent years that is accelerating beyond traditional energy sources and into a more sustainable future—and it has even showed growth during the COVID-19 pandemic.
All sources will be important to continuing America’s energy independence, according to Goodman, who says it’s highly important to keep up with growing demand. “We believe the time is now to position a business plan to take advantage of these opportunities,” she says.
The team is currently working to close deals for both traditional and renewable assets. Since its founding, Accelerate has sought to operate assets in a sustainable way to protect people and the planet. Goodman says it aims to reduce emissions from oil and gas operations, which “ties nicely to a move into renewable energy.”
From here, Activate Renewables plans to execute a multi-year business strategy to aggregate its target acquisitions into a diversified, cash-flowing portfolio of scale. Potts will remain CEO of Accelerate and its business lines.
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