WRAP, the Waste and Resources Action programme has launched the UK’s first fund targeting companies in the recycling sector. The fund is being managed by Impax Asset Management and will start investing in June following clearance from the European Commission and the Treasury.
WRAP has committed £4 million to the new fund with a further £1 million to be raised from private investors. Investments will be made in around 10 to 15 recycling or waste management SMEs that would otherwise face difficulty in raising commercial equity finance.
WRAP research estimates that recycling SMEs will require £1.5 billion in funding between 2003 and 2018 including significant levels of equity investment that the market is currently failing to supply. Already worth £12 billion a year the recycling sector’s turnover driven by major policy and regulatory drivers is expected to grow between £20 billion and £30 billion within 15 years.
Jennie Price, WRAP’s chief executive said: “This pioneering, profit-driven fund is meeting a genuine need in the market. There are currently no funds focussed on recycling but we believe that this is because of a lack of technological and market understanding among investors rather than a lack of good investment opportunities.”
WRAP appointed manager Impax Asset Management because of the firm’s strong environmental focus and its experience in SME and private equity deals.