Ares Management Corporation, a prominent alternative asset management firm, has initiated a new collaboration with Savion Equity, a subsidiary of energy giant Shell. The joint venture, named Tango Holdings, aims to enhance U.S. solar power generation. Ares holds an 80% stake in the venture, leaving 20% to Savion, which has been actively pursuing large-scale solar and energy storage projects across 28 states since its establishment in 2019. Noteworthy is the Tango Holdings portfolio, which includes significant solar developments in states like Ohio, Kentucky, Oklahoma, and Indiana.
Strategic Moves of Tango Holdings
The newly formed Tango Holdings is tasked with managing a 496 megawatt portfolio of solar projects previously developed by Savion. Furthermore, Tango will have equity stakes in various notable projects, such as the Martin County Solar Project and the Kiowa County Solar Project. Savion is set to lead as the managing member, while Shell Renewable Asset Management International will oversee the asset management facet of the projects, indicating the strategic division of roles within the joint venture. These arrangements were confirmed upon immediate effect through a simultaneous signing and closing process, although further detailed terms remain undisclosed.
How Does This Compare to Ares’ Previous Investments?
Ares’ involvement in Tango Holdings extends its history of active investment in power generation assets. Within the last year alone, the Ares fund acquired stakes in facilities representing over four gigawatts across nine U.S. states, showcasing consistency in their strategic inclinations. Unlike these traditional investments, Tango signifies a collaborative venture, highlighting Ares’ openness to cooperative projects in the renewable energy domain. This joint endeavor serves to underline Ares’ investment strategy that pairs financial interests with sustainable energy goals.
The agreement underscores the alignment between Ares’ significant scale and Savion’s development expertise. As Steve Porto, Partner at Ares expressed,
“We look forward to partnering with Savion on this exciting initiative that allows us to draw on our combined capabilities in power generation to support these important assets. As a leading investor in critical private infrastructure projects, we believe Ares’ scale and experience across the asset life cycle alongside Savion’s operational prowess will help bolster the supply of electricity in key US markets as we seek to deliver attractive returns for our investors.”
Shell also sees this transaction as part of a broader strategic effort to develop, and eventually divest, renewable generation projects. This model enables Shell to continue expanding its renewable assets without long-term retention, as highlighted by Greg Joiner of Shell,
“The investment by Ares is a testament to Savion’s success building and operating assets that deliver renewable power to key energy markets in the USA. Launching Tango with a strategic investment partner like Ares will allow us to maximize value of our power generation portfolio as we continue to build a more focused, competitive, and adaptive business.”
While prior ventures mainly focused on Shell independently developing and managing renewable projects, Tango Holdings illustrates a shift towards joint ventures, particularly those involving significant third-party investment. This aligns with Shell’s plan to partner strategically and leverage such collaborations to augment value and competitive advantage. Analyses in previous discussions flagged Shell’s cautious approach towards renewable assets, balancing direct development with calculated investments.
Ares’ involvement in Tango Holdings reflects its broader ambition to play a pivotal role in the proliferation of sustainable energy infrastructure. For stakeholders, the alliance offers potential financial upsides, drawn from the operational scalability and technical know-how of Shell and Savion. The solar power projects targeted by Tango aim to provide critical electricity supplies in key U.S. markets. This deliberate alignment between Ares and Savion illustrates a trend where asset management firms and traditional energy giants collaborate in renewables, seeking profitable avenues in environmentally conscious industries.
