Government launches £125m Environmental Investment
Fund
The UK government’s £1 billion Innovation Investment Fund is off
the ground with the first closing of a £125 million environmental
innovation fund.
The Environmental Innovation Fund, managed by Hermes Private
Equity, will continue to look for new backers, but will now start
investing in low carbon and clean technology funds and co-investing
in companies, focusing on increasing the efficient use of resources
(both renewable and non-renewable) at all stages of production and
consumption. The fund expects to commit its capital over the next
2-3 years.
Science and Innovation Minister Paul Drayson claimed investment
has flowed into the Innovation Investment Fund at extraordinary
speed. “It’s already one of the largest European funds for
investing in high-tech firms. But what’s more important is rapidly
channelling that capital into [the] green tech sector. After a
tough spell, things are looking up for our entrepreneurs and
innovators.”
The CEO of Hermes Private Equity Susan Flynn said increased
awareness of environmental issues and policies to tackle climate
change presents an opportunity for investors and companies Hermes
will invest in. “At this stage in the economic cycle there are many
forward-looking companies who may not have funding available to
them. We have already identified a number of attractive investment
opportunities and anticipate that [the fund] will begin to deploy
capital shortly.”
The UK Innovation Investment fund was announced last June by
Gordon Brown, the Prime Minister. Hermes Private Equity and the
European Investment Fund were subsequently confirmed as
fund-of-fund managers for two separate funds-of-funds. The
government put in £150 million to get the ball rolling and the fund
has now attracted private investment to more than match this amount
with the total first closing of £325 million.
For more information, visit the BIS website.