£125m green fund launched

Posted on 26 Jan 2010 by The Manufacturer

The UK Innovation Investment Fund is off the ground with the first closing of the £125m Hermes Private Equity environmental innovation fund.

Having taken only seven months for the UK Innovation Investment Fund (UKIIF) to launch the first of two funds, the Hermes Environmental Innovation Fund, which has already raised £125m and will continue to seek further funding from investors. The Environmental Innovation Fund, managed by Hermes Private Equity, will now start investing in low carbon and clean technology funds and co-investing in companies, providing much needed venture capital to help these innovative businesses grow. The Hermes Fund will focus on investment opportunities aimed at increasing the efficient use of resources — both renewable and non renewable — at all stages of production and consumption.

Over the past decade, the UK has emerged as a European frontrunner in alternative energy investment and is well positioned to further develop a sustainable market competitive globally. According to figures from the Carbon Trust, for example, the UK is now the sixth largest low carbon and environmental economy in the world, with 3.5% of global market share — bringing the annual economic benefits and investment to Britain of approximately £6-8bn.

Prime Minister, Gordon Brown MP, said, “The UK has a wealth of innovators and entrepreneurs seeking to create the businesses of tomorrow, businesses that will make the UK a world-leader in low carbon innovation and industry and help to tackle some of the biggest challenges we face around energy and climate change. This fund will provide substantial investment where it is needed and deliver strong returns for investors.”

Hermes Private Equity CEO, Susan Flynn, commented, “Increased awareness of environmental issues and policies to tackle climate change presents a real opportunity for investors and the innovative companies we will invest in. At this stage in the economic cycle there are many forward-looking companies who may not have funding available to them. The Hermes Private Equity Environmental Innovation Fund (HPEEIF) will ensure that those seeking finance for promising new environmental ventures will have access to a source of funding.