Environmental Technologies Fund closes £110m fund

The first-time venture fund is backed by financial institutions aiming to capitalise on the numerous possibilities for green technologies in Europe.

Environmental Technologies Fund has held its final close on £110 million (€143.4 million; $218.8 million), according to Peter Ho, a founding partner at the clean technology investor.

Peter Ho:
first time
clean-tech fund

The fund held its first close in November 2006 on €50 million (76.3 million), but it had waited until the end of February this year to reach its final close as some investors were deciding whether to commit, he said.

The firm has drawn its funding entirely from financial institutions, which it believes is rare for a first time venture company. Financial companies have eschewed first-time venture investors since the dotcom bubble burst at the turn of the millennium.

Its investors included cornerstone investors global insurance company Swiss Re and the European Investment Fund as well as an independent subsidiary of Rabobank Robeco.

Horsburgh said: “We look to buy companies with existing early revenues because you can go to customer and find out why they invested. We also seek strong intellectual property rights and businesses that are globally scaleable.” The firm has an industry focus, which it believes sets it apart from its peers.

It has already made two investments in energy-efficient metal producer Metalysis and vibrating energy company Perpetuum.

“Clean tech is a vibrant opportunity in Europe and the sector has got a real shot of being a very important part of venture in Europe,” he said. The sector is probably the first venture technology in which Europe has forged ahead of the US, he said.

Horsburgh was a senior vice president at brokerage PaineWebber International for ten years and a director at UK bank NatWest.

The firms two other founding partners are Patrick Sheehan and Henrik Olsen. Sheehan has 21 years of venture capital experience with FTSE 100 investment firm 3i, including founding its US venture business. Olsen was a managing director at US conglomerate General Electric’s private equity arm.

Its chairman David Quysner is also chairman of European venture firm Abingworth.

Other firms are active in the attractive clean tech sector. The firm’s rival Capricorn Venture Partners aims to close fundraising for its fund by the end of the first quarter of 2008 with a target fund size between €80 million and €100 million.