UK government launches £125 million Environmental Investment Fund

Funding opportunity

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 website: http://www.dius.gov.uk