Partners Group to buy California (U.S.) energy assets for $2.2 B
Swiss private equity firm Partners Group will buy an energy asset management platform and certain gas-fired power plants in California from U.S.-based Avenue Capital Group for $2.2 B, the companies said on Tuesday.
U.S. power consumption is expected to hit record highs in 2025 and 2026 due to growing demand from data centers dedicated to artificial intelligence and cryptocurrency, while homes and businesses are using more electricity for heat and transportation.
The surge in demand has, however, strained the country's grid infrastructure.
Avenue's Middle River develops onsite battery energy storage systems (BESSs) at its existing gas-fired power plants. These systems are charged by surplus renewable energy from the grid and store energy that can be discharged when needed.
"Natural gas-fired plants and BESSs are becoming increasingly critical for ensuring grid reliability," Partners Group said in a statement.
Under the deal, Partners Group will buy Middle River Power and a 1.9 GW portfolio of 11 natural gas power plants from a fund managed by Avenue.
Middle River Power was formed in 2016 to operate and manage Avenue's investments in the power sector. It also provides asset management services to third-party owners of power plants totaling around 4.8 GWs of capacity outside California.
"The portfolio benefits from thematic tailwinds, including demand growth and the increasing penetration of intermittent renewables," said Partners Group, which has about $150 B in overall assets under management globally.
Natural gas prices have risen about 9% so far this year, and touched a 26-month high earlier in March on record flows to liquefied natural gas export (LNG) plants and on worries that gas exports from Canada to the U.S. could decline due to U.S. President Donald Trump's tariffs on Canada and Mexico.
Partners Group was advised by Davis Polk & Wardwell on the deal, whereas Avenue, which has over $11 B in assets under management, was advised by Guggenheim Securities and Morgan Stanley & Co., the companies said.
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