Robeco Private Equity has invested more than 50 percent of its two latest private equity funds of funds.
The Netherlands-based firm is investing both its $250 million fund of funds, Robeco SAM Clean Tech Private Equity III, and a separate $100 million fund of funds that focuses on environmental, social and governance practices, Robeco Responsible Private Equity Fund II. Both funds were launched in 2010 and closed last year.
“In both of these funds, we find growth equity and the small to mid-market to be the most attractive elements,” Robeco global head of private equity Andrew Musters told Private Equity International. “We have an overweighting to that compared to early stage venture and very large buyouts.”
Robeco invests roughly a third of its capital in the US, a third in Europe and a third in Asia.
The firm’s cleantech fund commits to managers investing in traditional renewables such as solar and wind energy but has increased its focus on the agricultural side of cleantech, such as smart irrigation technologies and “everything that has to do with resource scarcity in the field of food and agriculture”, Musters said.
The group has also observed a high amount of quality investment opportunities in “resource efficiency”, according to Musters. “One of the real sweet spots for us in which we actually invest more money than in renewables is energy efficiency improvements, [such as] smart metering.”
Smart meters monitor and report energy consumption levels for more efficient use of energy.
Robeco SAM Clean Tech Private Equity III participates in primary commitments, co-investments and secondaries, but has been the most active investing on the secondary market.
For Robeco’s fund of funds that focuses on ESG practices, manager selection involves scoring firms based on ESG-related issues, such as how private equity funds deal with trade unions, labour relationships and health and safety.
The firm’s responsible and sustainable private equity group was founded by Musters in 2004. Since then, it has observed the number of dedicated cleantech funds globally increase from fewer than 100 to around 400, Musters said.
“We are really bullish on the sector because it is so future-oriented.”
Excluding the year 2009, clean energy asset investments have grown at a compounded annual growth rate of 30 percent since 2001, reaching $146 billion in 2011, according to Robeco’s 2012 Clean Tech Private Equity study. During 2011, clean tech companies raised a combined $9.2 billion in venture and growth capital funds with disclosed sizes.