The government has launched a £125m environmental fund with Hermes Private Equity to provide “much needed venture capital” to help innovative businesses grow.
The Hermes Private Equity Environmental Innovation Fund (HPEEIF) marks the first major investment of the government's £150m UK Innovation Investment Fund (UKIIF), launched in June 2009 to invest in start-ups and small businesses with significant growth potential.
Managed by Hermes, the new "fund of funds" raised £50m of UKIIF funding and an additional £75m from private backers, and will continue to seek further funding from investors, the government said. It will invest in low carbon and clean tech funds, as well as co-investing in fast growth companies.
According to the Carbon Trust, the UK is now the sixth largest low carbon economy in the world, with 3.5% of the global market share.
Hermes Private Equity CEO Susan Flynn said that solving environmental issues would present real opportunities for UK entrepreneurs and investors over the next few years.
“At this stage in the economic cycle there are many forward-looking companies who may not have funding available to them. The HPEEIF will ensure that those seeking finance for promising new environmental ventures will have access to a source of funding,” she said.
Science & innovation minister and former technology entrepreneur Lord Drayson added that the UKIIF had proved extremely popular with investors and is already one of the largest European funds for investing in high-tech firms.
“What’s more important is rapidly channelling that capital into Britain's burgeoning green tech sector. After a tough spell, things are looking up for our entrepreneurs and innovators,” he added.
Flynn said a number of attractive investment opportunities have already been identified and she expects the fund to “begin to deploy capital shortly”.
© Crimson Business Ltd. 2010
