Avenue to Sell 11 California Nat Gas Plants for $2.2B to Partners Group

Avenue Capital Group is offloading a portfolio of energy transition-focused assets in California from its Avenue Golden Continuation Fund, L.P.—managed by Avenue and run by Middle River Power—to Partners Group for $2.2 billion.

The deal encompasses 11 natural gas-fired power plants spread across California, featuring nine simple-cycle peaking plants and two combined-cycle gas turbine facilities.

Avenue Capital Group spun off Middle River Power in 2016, which went on to pioneer Hybrid Energy Centers. These setups blend battery energy storage systems with existing gas-fired power plants, allowing them to soak up excess renewable energy from the grid and cut down on carbon emissions.

Marc Lasry, co-founder and CEO of Avenue Capital Group, underscored the firm’s enduring commitment to California’s energy landscape, pointing out that their 2016 entry into the state was driven by a calculated bet that well-maintained natural gas-fired power plants would stay vital to the grid amid the shift to cleaner energy.

The portfolio up for sale encompasses not just the power plants but also Middle River Power’s asset management services, which extend to roughly 4.8 gigawatts of power capacity beyond California’s borders.

Avenue Capital Group, established in 1995, keeps steering over $11 billion in assets, focusing on opportunistic credit and special situations investments across the U.S., Europe, and Asia.

Guggenheim Securities and Morgan Stanley served as financial advisors, with Latham & Watkins providing legal counsel.