A new venture has been set up targeting new energy solutions in the Nordic region. P/S BI New Energy Solutions has raised DKr250 million to invest in unquoted companies that develop and produce new energy technologies. Danish asset management firm, BankInvest and cornerstone investor Dansk Olie Og Naturgas (DONG) launched the venture last autumn and the fund has also attracted several prominent institutional investors with more expected to join later this year. BankInvest expects a further DKr450 million to be subscribed this month and a further DKr200 million in the autumn.
The global demand for alternative energy is increasing by around two per cent a year and market growth for new energy technologies is expected to be around 20 per cent to 30 per cent per year, exceeding growth forecasts for most other sectors. In the Scandinavian region in particular there is a dearth of viable projects and companies focused on the development of new energy technology. Many of these companies have a large growth potential, but lack the funding to finalise and commercialise their projects. The geographic focus of the fund will primarily be Denmark, then the rest of the Nordic region. The fund will also consider opportunities in Germany, the UK, Ireland, Switzerland, France and the Benelux countries.
Niels Thuesen, managing director BankInvest Group, said: “It became clear from our preliminary work that there were many exciting projects and companies with big perspectives within this area that lacked venture capital and assistance in developing their business ideas.” BankInvest and DONG joined forces last autumn to carry out preliminary studies of the market focusing mainly on Denmark and the other Nordic countries.
The new venture is headed by managing director Even Bakke, previously senior vice president of ABB’s research department in Zürich. He is assisted by a team of investment managers who will identify and develop the companies that P/S New Energy Solutions will invest in.
BankInvest also runs a fund that invests in quoted companies in the alternative energy sector. In its first two biotech venture funds, BankInvest achieved returns at the end of 2001 of 113 per cent from its 1998 fund and 60 per cent from its 1999 fund. The group’s IT venture fund however has failed to make such impressive returns. Launched just before the IT downturn in April 2000, it has recorded losses of around 25 per cent.