Private equity firm A Capital has established an environment and energy focused fund, which will invest in European, particularly French, companies, with a view to expand them into China, according to a statement.
The firm is targeting $500 million for the fund and has already secured commitments from state-owned enterprise CECEP and GCL New Energy.
The new vehicle, named E-CUBE, will invest in majority and significant minority positions in performing European companies that have proven expertise or technology in the environment and energy sectors.
The purpose of the investments will be to accelerate the growth of these businesses and benefit from the scale of the Chinese market, as well as secure their positions and intellectual property in the largest energy market of the world.
E-CUBE also intends to have a domestic impact in China, hoping to help solve some of the most pressing environmental challenges in urbanising Asia and globally, according to the statement.
E-CUBE will focusing on sectors including air quality, water, waste, efficiency, renewable energy, new materials and smart grids.
“Following the success of A CAPITAL I, we realised that the environment and energy sectors were becoming central to both Europe and China’s future,” André Loesekrug-Pietri, Chairman of A Capital commented.
“Europe has world-leading R&D and innovative companies that lack scale due to fragmentation and low-growth markets, China has the market and the imperative need for these technologies, to tackle the massive challenges that it faces, in particular pollution, urbanisation and clean energy needs.”