Ancala announces £551m Growth Fund to increase support for portfolio companies focused on the energy transition

The new fund (Ancala Essential Growth Infrastructure Fund) was oversubscribed and will support Portsmouth Water, Biogen and Leep Utilities only. It contains commitments from a diverse range of institutional investors from Europe, North America and Asia.

Portsmouth Water is an industry-leading water only company. It offers its customers the lowest average water bills across England and Wales. Ancala’s Growth Fund will provide Portsmouth Water with £120m to help finance the construction of the UK’s first major new reservoir since the 1980s. It will also support the company to further enhance the efficiency and resilience of water supplies in the region.

Biogen is a leading UK anaerobic digestion platform that owns 14 anaerobic digestion plants across England, Wales and Scotland. Biogen generates renewable energy and nutrient rich fertiliser from recycling over 550,000 tonnes of organic waste every year, most of which would otherwise be sent to landfill. Ancala’s Growth Fund will support the business to further build on its market-leading position in the UK biogas sector. This will be delivered through acquiring complementary sites and investing in technologies that enable the business to inject low carbon gas directly into the UK gas grid, further supporting the national gas network decarbonisation.

Leep Utilities owns and operates last-mile utility networks across the UK. It provides integrated solutions for water, heat, cooling and electricity for commercial and residential sites across the UK, including MediaCityUK in Manchester, Battersea Power Station and Wood Wharf in London. The new Growth Fund will assist Leep Utilities to deliver on a significant order book and roll out new sites across the UK, along with further investing into its decarbonised heat initiatives.

Ancala first invested in these three assets in 2017 and 2018, as part of Ancala Infrastructure Fund I. The leading infrastructure investor has since helped Portsmouth Water to implement improvements across the business. Portsmouth Water is now well placed to continue to deliver on its 25-year vision to supply high quality drinking water, high levels of customer services and excellent value for money. To date, Ancala has supported Biogen to complete three acquisitions, optimise its performance, and more than double its revenues to almost £50m in its latest financial year. It has also helped Leep Utilities to secure new sites, acquire SSE Water and create more than 100 new jobs. The business has now contracted over 100,000 multi-utility connections to homes and major businesses and is growing across electric water and heat projects in the UK. Ancala has helped Leep Utilities to more than double its revenues over the last five years to more than £35m. Leep Utilities has substantial additional revenue within its order book to be generated over the coming years.

Ancala has a dedicated team of more than 40 professionals working from its offices in London and Luxembourg. The experienced infrastructure investor has a total AuM of over €3.6bn which comprises of 18 assets located across Europe that operate in essential infrastructure sectors including renewable energy, transport and utilities.

The Growth Fund follows an active investment period for Ancala. Since the start of 2023, Ancala has invested in international aerial emergency services provider Avincis, leading Norwegian supply base Fjord Base and decarbonised heating and cooling specialist Noventa. It also helped waste and resource management group Augean to acquire Future Industrial Services, a complementary waste management and industrial services business.

Spence Clunie, Managing Partner, Ancala, commented:

“Water supply and diversity of effective renewable energy sources are two of the most critical issues facing the UK. Our Growth Fund represents our continued commitment to supporting the expansion plans of our portfolio businesses and the solutions they provide, including contributing towards the energy transition.

“We’re thrilled that our diverse base of institutional investors share the same enthusiasm and conviction to help these businesses to create long-term value and make a marked improvement to the communities and environments which they serve. We are grateful for their support.”

Louise Manfredi, CEO, Leep Utilities, added:

“Ancala’s Growth Fund provides us with added firepower to pursue our expansion plans and explore more sustainable energy solutions.

“The Ancala team has been a major supporter of Leep’s move into decarbonising heat and continues to take a highly proactive role in helping us to identify strategic partnerships and opportunities that help our plans. I’m looking forward to the benefits this will bring to new and existing customers, and towards improving the availability of green energy across the country.”