Katharine Hidalgo
[thumbnail]
Managing partner Beverley Gower-Jones said:
I want to close at the hard-cap and I don’t see any reason why we shouldn’t in the next 12-18 months.
The fund held a ï¬rst close on £40m in May 2020, against its target of £100m. Clean Growth Fund, which is structured as a UK LLP, will invest in UK-based early-stage startups involved in clean technology in transport, power, energy and waste management.
Clean Growth Fund has a hurdle rate of 8% and a management fee of 2.5% up to £50m, and a 1.5%management fee on any commitment beyond that amount.
“We’ve seen a lot of interest from LPs domestically and internationally from family ofï¬ces, corporates, endowments and sovereign wealth funds”, said Gower-Jones. “Covid-19 has meant investors are doubling down on green and clean. Climate change is now widely recognised as a huge issue that technology can mitigate and solve, so the atmosphere for fundraising has been extremely positive,” she said.
“The ï¬rm is currently raising funds virtually and over the phone in the wake of the coronavirus crisis,” said Gower-Jones.
“The main concern LPs have in the fundraising process is ticket sizes,” she said. “We’re aiming for a maximum commitment of £40m so as not to have the fund be too concentrated, but for larger investors this can be too small” said Gower-Jones. The fund has a minimum commitment size of £3-5m, depending on investor type.
Clean Growth Fund currently has two investors: CCLA Investment Management and the Department for Business, Energy & Industrial Strategy, each with a commitment of £20m. “At ï¬nal close we could have anywhere from six to 15 LPs,” said Gower-Jones.
Typical equity cheques will start at £500,000-3m for initial investments, with the potential for follow-on investments to be as much as £15m. It has a ï¬ve-year investment period and a ï¬ve-year divestment period and could hold up to 25 investments.
The fund has yet to make an investment following its ï¬rst close, but currently has a term sheet out with a pipeline of ï¬ve or six companies spread across the fund’s sector focuses.
Pinsent Masons is providing legal advice and the ï¬rm is not yet using a placement agent.
