Clean Growth Fund achieves target final close at £101m for first fund
Final close includes £31m of new commitments to invest in the very best UK clean tech companies from Aviva Investors, Merseyside Pension Fund, Queens’ College Cambridge and South Yorkshire Pension Fund
The Clean Growth Fund, a venture capital fund investing in the most promising early-stage UK clean technology ventures, has closed its first fund with £101m in capital commitments. The first and final close comes with new commitments of £31m from two of the UK’s largest local authority pension funds – Merseyside and South Yorkshire – and from Queens’ College Cambridge and Aviva Investors, the global investment management company.
Established in 2020, with cornerstone funding from the Department of Business, Energy & Industrial Strategy (BEIS) and investment manager, CCLA, the Fund received subsequent investments from Strathclyde Pension Fund and Aviva PLC. The Clean Growth Fund’s remit is to accelerate the commercialisation of clean growth technologies in the UK, contributing to the UK’s efforts to deliver Net Zero by 2050 and encourage more private capital into the sector.
The Fund targets the UK’s most promising early-stage cleantech companies that are pioneering carbon emission reductions in the areas of power and energy, buildings, industry, transport and waste.
With the Clean Growth Fund reaching its original £100m target, the Fund will now focus on expanding its investment portfolio across the UK. Over the past 15 months, it has made investments in the areas of smart charging, low-carbon heating, grid services, renewable energy generation and emission reductions in heavy industry. Its most recent investment (announced yesterday – March 28th) was in Sunswap, a company that has developed a zero-emission transport refrigeration technology.
Beverley Gower-Jones, Managing Partner of the Clean Growth Fund, said:
We are delighted that we have reached our £100m target; the Fund’s size is wholly fit-for-purpose for the early-stage, clean tech sector in the UK.
“It’s hugely exciting to be identifying, investing and supporting the country’s very best companies that have innovative, disruptive solutions that offset the impact of climate change. Given our 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 the Department for Business, Energy & Industrial Strategy (BEIS) said: “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.”
George Graham, Director of the South Yorkshire Pensions Authority, a £10.5bn local government pension fund, said: “Achieving the country’s and our pension fund’s net zero goals requires the development and exploitation of new technologies which support the decarbonisation of the economy. The Clean Growth Fund connects investors with the innovators who will give us the tools to make the step change necessary to get to Net Zero.”
Councillor Pat Cleary, Chair of Merseyside Pension Fund & Leader of the Green Party Group of Wirral Council: “I’m delighted that Merseyside Pension Fund is able to make this kind of investment; supporting innovative young green businesses and helping to support the UK’s low carbon economy. Investing in climate solutions is an important part of the Fund’s Net Zero plans. We were particularly impressed by the CGF team’s focused and disciplined approach to driving positive climate impact along with a financial return.”
Notes to Editors
Clean Growth Fund was launched in May 2020. Its remit is to drive superior financial returns for investors and accelerate the development and commercialisation of clean growth technologies in the UK – leading to the creation of new and skilled jobs across the country and contributing to the UK’s efforts to deliver net zero by 2050. In November 2021, it was listed in the Real Deals Future 40 Impact Investment Funds.
In addition to Sunswap, Clean Growth Fund has to date invested in:
- Piclo – which enables network operators to procure flexibility services that help balance the grid;
- Indra – the UK smart charging technology company;
- tepeo – a company that has developed a low-cost zero emission boiler;
- Carbon Re which uses AI to reduce emissions in the cement and other heavy industries;
- Holiferm which develops and supplies sustainable, non-fossil based ingredients for industrial and consumer products;
- Above which is revolutionising the solar industry, developing software, digital models and AI to help generate more solar power from data.
Beverley Gower-Jones has worked in the energy and clean tech sectors for 30 years. A fellow of the Energy Institute, she’s also CEO of Carbon Limiting Technologies (a clean tech advisory firm), and before CGF and CLT she was a founder and Vice President of Shell Technology Ventures, and was instrumental in defining Shell’s technology venturing strategy.
Aviva Investors is the global asset management business of Aviva plc. The business delivers investment management solutions, services and client-driven performance to clients worldwide. Aviva Investors operates in 14 countries in Asia Pacific, Europe, North America and the United Kingdom with assets under management of £268 billion in assets under management as at 31 December 2021.
Merseyside Pension Fund, with £10.5 billion AUM, administers the Local Government Pension Scheme in the Greater Merseyside area. The Fund has pledged to make its investments Net Zero by 2050 or sooner and has made a Paris Aligned Investment Initiative Net Zero Asset Owner Commitment to use the IIGCC NZ framework (as a member of the Northern LGPS collective).
Queens’ College is one of the 31 constituent Colleges within the University of Cambridge. It has investment assets of c£120 million and is keen to find areas in which to invest in where there is the potential for significant positive impact, particularly in respect to the environment.
South Yorkshire Pension Fund is a £10.5bn local government pension fund with around 170,000 members working for around 600 different organisations including councils and schools and colleges across the former metropolitan county. The Fund is run by the South Yorkshire Pensions Authority, a single purpose local authority.