Battery storage is a great fit for institutional investor portfolios, says Prime Capital head of infrastructure Mathias Bimberg
Prime Capital is betting big on battery storage. The Frankfurt-headquartered independent asset management firm and financial services provider – with approximately €3.9bn in assets under management and €8.9bn in assets under administration – recently announced the eighth closing of its Prime Green Energy Infrastructure Fund II. The fund’s total commitments amounted to more than €1bn – the target fundraising volume was significantly exceeded, partly due to the perceived opportunities in one of the fund’s key target sectors: battery storage.
The battery storage industry is a sector to which Prime Capital is gradually increasing its exposure. In another recent deal – announced in January this year – Prime Capital strengthened its battery portfolio in Germany, which the firm described as “one of Europe’s most attractive and liquid power markets”, with the acquisition of Project Monet, a 135 MW, 4-hour utility-scale battery energy storage system located in Sachsen-Anhalt. The deal sent out a clear signal that the firm – which has invested in a number of wind and solar projects – sees battery storage as playing a crucial role in the energy transition.
Batteries ‘much less complex than wind farms’
Upon the latest closing of its Prime Green Energy Infrastructure Fund II, Prime Capital outlined its belief that if energy storage projects could be efficiently executed there was “significant return potential”. In an exclusive interview with Tamarindo insight director Ben Cook, Mathias Bimberg, Prime Capital’s head of infrastructure – and a panellist at the upcoming Investing in Battery Energy Storage 2026 conference in London – explained the reasons for the appeal of the battery storage sector, explaining that from a technology perspective, for example, batteries are much less complex than wind farms. He added: “You also don’t have volume risk, you only have price risk. You have much less construction risk, so there’s a different set of risks. I think, for us, it’s easy to understand the industry, but I think what we are also seeing is private equity investors and even real estate investors entering into the sector.”
Many institutional investors see investment in battery storage as an effective way of diversifying portfolios. Bimberg explained: “Looking at it from, let’s say, the institutional investor side – and we are acting on behalf of institutional investors – if you look at the portfolios of insurance companies and pension funds, they have a lot of power, but they are under allocated in storage.” Consequently, battery storage is a great fit for institutional investor portfolios, Bimberg argues. Which investors will perform best in the battery storage sector? “I think there will be differentiation,” Bimberg says. “We have scale – we just did a core investment and, together with one of our partners, we are sitting on a 24-month pipeline of 18 GWh. We also have scale when it comes to procuring batteries and we are seeing this in the pricing we are receiving.” The strategies investors adopt when operating in the battery storage sector will vary, Bimberg says. “There will ultimately be a lot of differentiation around how you play it, you can do it more successfully or less successfully and we are relatively optimistic that this will be super-interesting for us right now.”
Battery storage build-out won’t be as fast as some predict
However, Bimberg doubts whether the build-out of battery storage will be as fast as some predict. “I think it will take more time to saturate the market than originally expected,” he says. Bimberg adds that between 2024 and 2025, the “arbitrage revenue potential” in every European market increased. “The question is, when is that trend going to go into the other direction? I think it will take longer than originally expected because we will continue to see a build out of intermittent technologies and batteries are the cheapest way to get a baseload profile and therefore I think at least for the next 24 to 36 months, it will continue to be a very, very attractive market environment.”
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