SAM Private Equity Energy Fund LP (SAM), a fund dedicated to making venture capital investments in non-polluting, alternative energy, has announced a €10 million commitment from CDP Sofinov. The investor is part of CDP Capital (fund manager for Caisse de dépôt et placement du Québec) and specialises in biotechnology, IT and industrial technologies (new energy, new materials, robotics, and aerospace). The company is also developing partnerships with funds in Canada, the US and Europe.
The SAM Private Equity Energy Fund is a subsidiary of Sustainable Asset Management (SAM), a Swiss firm focused on investments driven by sustainability, and has so far raised €45 million to invest over three years. Hans Dellenbach, private equity fund administrator and controller at SAM, said: “This is just the beginning for this sector. At the moment we are checking its performance, as there is very little market information, before deciding how to continue. Although it will be effected by cyclical changes, alternative energy will be a very important sector in the long term.”
The energy fund was launched last year while SAM was raising its first private equity fund, the SAM Sustainability Private Equity Fund. This fund closed in September, having raised €37.8 million from European investors include Swiss Re and UBS. It will invest in sustainable energy projects, agricultural and food production technologies and resource productivity (water purification and recycling). Dellenbach said: “When we were raising the sustainability fund we often heard that companies, although they were willing to invest in the fund, would prefer a fund focused exclusively on energy. So we started raising the second fund at the same time.” To date the fund has made four investments, including German fuel cell company, ZOXY.
SAM’s sustainability fund invests in tandem with the energy fund in alternative energy companies involved with energy efficiency, renewable energy, energy management and energy storage as well as related e-commerce and information technology projects. The fund will target investments in companies at an early development stage (10 per cent), expansion (70 per cent) and later stage/pre-IPO (20 per cent). Geographically, 60 per cent of the companies will be in Europe and 40 per cent in North America.
Dellenbach expects the fund to close at the end of November, when it secures a commitment from Mitsui. The fund’s backers include Suncor, EDF and Norsk Hydro Technology Ventures, the corporate VC fund of Norwegian oil and energy supplier Norsk Hydro, which committed €5 million in July this year. The lead investor in the fund is Hydro-Québec CapiTech, the venture capital arm of Hydro-Québec, which invested €15 million at the same time.
Another fund targeting the energy sector in Europe is Luxembourg-based Gerrard Energy Ventures, currently raising its first €150 million fund. Geneva Energy Advisors advise the fund, which has so far secured a commitment from a Swiss bank and a €20 million investment from Old Mutual. The fund’s portfolio includes Windforce, iVentures Capital, BuyENERGYonline and BizzEnergy.