By Simon Jessop
LONDON (Reuters) – European private equity firm Verdane has raised 700 million euros ($755 million) for its second fund focused on companies helping to decarbonise the economy, its managing partner told Reuters.
Verdane Idun II had reached its hard cap at more than double the size of its predecessor fund in a sign of growing demand from a range of institutional investors from pension schemes to endowments and insurers, Bjarne Lie said.
“This is one of the, if not the, largest decarb(onisation) pure-play growth funds in Europe,” he said, adding it showed “large pockets of capital are starting to realise that our largest problems are our largest investment opportunities”.
Investors in the fund include Norway’s state climate investment fund, Nysnø Climate Investments; Banque de Luxembourg; the European Investment Fund; Dutch pension manager MN; and Finnish investor Tesi.
Nearly a third of the investor base comes from the United States.
The fund would aim to invest between 20 million euros and 100 million euros in companies across a range of sectors, with a focus on the energy transition or resource efficiency, including heat pumps and waste-to-value activities, Lie said.
As well as targeting a gross internal rate of return of 25%, all investments from Idun funds need to ensure that for every million euros invested at least 5,000 tons of greenhouse gases are abated.
Part of the firm’s carried interest – its share of profits incurred over the life of its investments – would also be linked to hitting the sustainability goal, Lie said, without giving details.
Norway-based Verdane has made more than 400 investments since 2003 and now has more than 150 investment and operations staff in its offices in Berlin, Munich, Copenhagen, Helsinki, London, Oslo and Stockholm.
(Editing by Mark Potter)
