The waste and recycling industry is not often in the headlines when it comes to private equity. But the sector is growing and generating many exciting start-ups, as society is moving towards greener living.
The need for new innovative waste and recycling ideas is the biggest in big cities like London. The London Waste and Recycling Board (LWARB) has now set up a new waste fund and the board is looking for a private equity partner to make the most of the investment fund.
LWARB announced on Monday that it plans to set up a £3 million investment fund to help London face the challenges of continued population growth. The plan is to invest in venture and growth stage businesses through this private equity fund.
The companies the fund is seeking to invest in include anything from innovate waste management technologies to new recycling ideas. To help with the management of the fund, the board is looking to partner up with a private equity firm.
LWARB chair, Richard Tracey, told Let’s Recycle, “London is growing and we will need increasingly to find innovative ways of preventing waste and dealing with unavoidable waste. With this fund we hope to continue supporting the development of infrastructure and businesses in London, and also accelerate the move to a circular economy in the capital.”
The Preferred Candidate
LWARB does not want to run the new fund on its own, but would prefer a private equity firm or a group of investors to help manage the new fund. The board has been part of similar ventures before, so finding a suitable partner shouldn’t be too hard.
The chair of LWARB’s Investment Committee, Melville Haggard, said in an interview, “We are looking forward to engaging with fund managers interested in co-developing this fund. Building on our past experience of financing waste infrastructure projects in London, we are confident that this new finance product addresses the needs of early stage ventures, helping businesses with high growth potential to get off the ground.”
The Potential Market
The industry does have plenty of potential in offering lucrative opportunities for private equity firms. The growth of cities around the world poses huge waste management issues for local authorities and the increased focus on lowering pollution levels means new green businesses must solve some of the current recycling issues.
In London, for instance, a recent North London Waste Authority report found that municipal waste for the 2014/15 period will increase to a total of 841,155 tonnes. This is over 5,000 tonnes more than the previous year.
Furthermore, the sector has already seen plenty of interest from firms. The most recent deal involved private equity firm Agilitas and the Danish environmental services company MH Gruppen. At the time, Martin Calderbank from the private equity firm said, “The waste management sector is one we know and like. We see excellent opportunities to continue the rapid growth of the business.”
It remains to be seen which private equity firm gets involved with the new waste fund. If you are looking for green deals, then visit the DealMarket website.