Experienced Cleantech Investor Shifts to Growth Companies


September 27, 2012

The cleantech sector fundraising may have slowed but a range of investors are still putting money into the sector as the graphic above shows.  An article in Fin Alternatives describes the current strategy for cleantech investor SAM (Sustainable Asset Management) in Switzerland, one of the older players in the field.


The opportunity lies in growth ventures, “profitable, fast-growing and have a solid customer base …  especially technologies that are resource efficient, that provide solutions to the energy, water utilities and transportation industries, and the food and agriculture sectors”. Less attractive are the venture capital type investments in startups with unproven technology and markets, says SAM.


Elsewhere, PI Online examines some of the returns from pension funds that invested in cleantech and reports that investors are “still waiting” for their cleantech portfolios to produce expected returns, particularly VC portfolios.


SAM says the underlying rationale for cleantech investing is strong. It is economics 101. There is “only so much arable land on this planet and if the population continues to grow and become more wealthy, people are going to consume more. The world needs to come up with more solutions and products that can somehow sustain that population and consumption pattern or figure out how to make consumption less resource intense”.


Inflows of capital to cleantech ventures remain strong as the graphic here shows. Since 2000, almost 400 cleantech funds have raised USD 65 billion in venture capital, expansion capital and project investments and last year it hit a record high-level point. SAM says the fund universe is maturing, with several managers raising their third- or fourth-generation funds.


The most common exit for PE investments in cleantech is M&A. Strategic buyers spent a value of USD 42 billion disclosed, making it the most important exit market for cleantech growth ventures. (Image source: SAM)


Other facts from SAM

– 2011 was higher than during the crisis years of 2008 and 2009. Private equity investments in clean tech companies—including majority stake investments, takeovers or private investment in public equities deals—totaled USD 12.3 billion in 2011 (USD 35.6 billion since 2001), according to SAM.

– Since 2005, more than 350 clean-tech companies have gone public, raising USD 58 billion, and although the market slowed in 2011, after record activity in the fourth quarter of 2010, initial public offerings raised USD 10.5 billion last year.

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