UK pension buys Climate Change Capital

The Universities Superannuation Scheme and Alliance Trust are among a consortium that purchased a majority stake in the climate-focussed investment bank, as well as committed £20 million to its new fund of funds.

Climate Change Capital, a UK investment bank dedicated to clean energy and a low carbon economy, has sold more than 50 percent of its management company for £56 million.

Its new majority shareholders are Alliance Trust, the UK’s largest general investment trust; The Universities Superannuation Scheme, the UK's second largest pension fund, Dutch financial services firm SNS REAAL; and Japanese trading house Mitsui & Co, the firm said in a statement.

Peter Moon, chief investment officer of The Universities Superannuation Scheme (USS), which recently upped its alternatives target to 20 percent, said the investment is representative of how USS feels a long-term, responsible investor should act.

“Across all asset classes, we aim to incorporate into our investment process an understanding of the dynamics of climate change, and we make these themes an important part of our engagement with companies, policy makers and other investors around the world,” Moon said.

Mark Woodal, CCC’s co-founder and chief executive, praised the consortium, noting that they recognise combating climate change is a necessity as well as an economic opportunity.

“With the help of our new shareholders we can now seed our funds with capital,” he said. “We are now in an even stronger position to deploy capital at scale to create wealth worth having.”

He added that the investment allowed some of the firm’s initial investors liquidity, though the statement did not disclose any specific details. Och-Ziff Capital Management sold its entire stake, while RMF, an institutional alternative investment division of Man Group, reduced its shares in the firm, Reuters reported.

The firm’s employees, including its board and management, will retain the majority of their shares and own roughly 30 percent of the firm, CCC said. Vivienne Cox, executive vice president and CEO of BP’s alternative energy division, will join its board as a non-executive director.

In addition to the investment in CCC, which will be used as working capital, the four investors have committed £20 million for a new fund of funds CCC is raising.

The firm recently announced two senior appointments in China as well as the hire of two senior property investors in London. It closed a €200 million cleantech fund in September 2007, and in October 2006 held a first close on $830 million for a $1 billion carbon fund targeting developing nations.