Merseyside and South Yorkshire pension funds have backed Clean Growth Fund, a venture capital fund investing in promising early-stage UK clean technology ventures.
The first and final close of £101m (€119m) included commitments of £10m each from the two local government pension scheme (LGPS) funds, plus £11m from Queens’ College Cambridge and Aviva Investors.
Strathclyde Pension Fund, another LGPS fund, had already committed to the fund alongside Aviva plc. The target for the fund was £100m.
Clean Growth Fund was established in 2020 with cornerstone funding from the Department of Business, Energy & Industrial Strategy (BEIS) and investment manager CCLA.
The fund’s remit is to accelerate the commercialisation of clean growth technologies in the UK, contributing to the country’s efforts to be carbon neutral by 2050 and encourage more private capital into the sector.
George Graham, director of the £10.5bn South Yorkshire Pensions Authority, said the Clean Growth Fund connects investors with the innovators who will provide the tools to make the step change necessary to get to net zero.
“We were particularly impressed by the Clean Growth Fund team’s focused and disciplined approach to driving positive climate impact along with a financial return.”
Councillor Pat Cleary, chair of Merseyside Pension Fund
Councillor Pat Cleary, chair of Merseyside Pension Fund and leader of the Green Party Group of Wirral Council, said investing in climate solutions was an important part of the pension fund’s net zero plans.
“We were particularly impressed by the Clean Growth Fund team’s focused and disciplined approach to driving positive climate impact along with a financial return.”
Over the past 15 months, the Clean Growth Fund has made investments in smart charging, low-carbon heating, grid services, renewable energy generation and emission reductions in heavy industry.
Its most recent investment was in Sunswap, a company that has developed a zero-emission transport refrigeration technology.
Beverley Gower-Jones, managing partner, said that given its background in clean tech commercialisation, the Clean Growth Fund is an active investor.
“We will help companies in our portfolio to fully realise their business goals and so make a massive and positive contribution to the UK’s net-zero goal, whilst at the same time deliver top quartile returns to our investors.”
Greg Hands, minister for energy and clean growth at BEIS, added: “Innovative technologies are key for the UK’s green industrial revolution and this Fund will help start-ups with exciting and valuable contributions get off the ground. The sizeable investment in the CIean Growth Fund demonstrates the talent and ambition in the UK and that investing in green tech is an attractive investment proposition.”
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