LGPS pool backs Clean Growth Fund’s second close
A major LGPS pool has come out backing the Clean Growth Fund’s second close, indicating growing investor demand for venture capital climate solutions
Border to Coast and Strathclyde Pension Fund has confirmed their backing for the second close of Clean Growth Fund’s Fund II.
Border to Coast supported the fund with a £22.5m investment as part of its Climate Opportunities Strategy while the Strathclyde Pension Fund increased its stake to £30m.
Combined with the first close, which was backed by Islington, East Riding and Strathclyde, Fund II has now raised £81.5m, bringing it over halfway towards its £150m funding target.
The capital will now be deployed backing Series A UK companies that have the potential to cut carbon emissions and grow Britain’s green economy, while delivering a target net return on capital of 20% IRR.
The companies currently backed by the Clean Growth Fund include the Clean Food Group, which specialises in developing sustainable oils and alternatives to palm oil and AmpliSi, a University of Sheffield Spin out which develops porous silicon materials for next-generation battery anodes. The Clean Growth Fund has also recently successfully exited Redesco, a major provider of ground source head solutions for homes and buildings in the UK.
Beverley Gower-Jones OBE, founder and managing partner of Clean Growth Fund commented on the latest commitments:" Increasingly, major institutional investors are looking to UK climate tech for exactly what it offers - strong long-term returns alongside real economic growth right across the country.
“We exist to connect British institutional capital with British innovation - the returns and the impact go hand-in-hand. Fund I invested in 19 UK startups on track to abate 27m tCO2e per year by 2030, equivalent to 1.5x the carbon absorbed by all UK forests. Fund II aims to back 25 companies and scale them. It has already invested in four start-ups, across Sheffield, Bristol, Cardiff and London, developing groundbreaking innovations in battery tech, food, heavy industry and buildings - creating good quality regional jobs and driving clean industrial growth” she added, highlighting the potential for place-based investment.
Keith Angood, portfolio manager at Border to Coast Pensions Partnership, said: “Border to Coast’s UK Opportunities Fund targets investment into high-quality UK companies and assets that can deliver attractive returns whilst contributing to economic growth and development across the UK. Clean Growth Fund II strongly matches these objectives, providing exposure to innovative UK businesses operating in a growing sector, managed by an experienced team with a proven track record. We believe it offers an attractive opportunity to deliver long-term value for our partner funds while supporting UK innovation.”
