Private individuals can invest in unlisted climate technology companies starting from €20,000, which the platform hopes will broaden access to climate impact investing.
Carbon Equity, an Amsterdam-based investment platform for private market climate investments, has launched the Access to Climate Tech Fund II, which will focus on climate innovations through private equity, private infrastructure and venture capital funds.
The new investment vehicle is Carbon Equity’s 11th fund, but the first aimed at retail investors, who can take part with a minimum commitment of €20,000. Carbon Equity’s previous 10 funds had only been accessible to investors willing to commit to a minimum investment of €100,000.
The fund gives investors exposure to at least 100 climate innovations, ranging from sustainable jet fuel to geothermal energy and innovative gigabatteries, through investments in five to 10 selected funds.
The launch of the fund is a “game changer”, Carbon Equity CEO and co-founder Jacqueline van den Ende told Impact Investor.
“Lowering the threshold is important because it dramatically increases the size of the group of people who can put their capital to work to accelerate climate innovation and the energy transition. Furthermore it lowers the hurdle to invest for people with less experience with investing in private equity,” Van den Ende said.
New investors
Carbon Equity last month announced it had raised €105m for its Climate Tech Portfolio Fund III, which took its total fundraising to more than €300m from over 1,250 investors, including high net worth individuals, entrepreneurs, directors, family offices and foundations. Opening up an asset class that was until recently only accessible to large investors may attract an additional 1,000 investors in the next two years to Carbon Equity, Van den Ende estimated.
The organisation is aiming to raise €25m for its new fund, but that may increase if it gets distributed through banks and wealth managers, according to Van den Ende. If this happens, the minimum investment of €20,000 on the new fund may be lowered.
The investment platform is aiming for an internal rate of return for the fund of between 8% and 12%, Van den Ende added.
Tipping point
The Access to Climate Tech Fund II is the first so-called European Long Term Investment Fund (ELTIF) in the Netherlands, according to Carbon Equity. ELTIFs were created by the EU to give retail investors access to non-public markets and activate savings to boost the economy.
“This is a fantastic opportunity. In the Netherlands alone, some €600bn of savings are laying dormant in bank accounts. At the same time, a large majority of Dutch people are concerned about the climate and want to take action,” Van den Ende said.
The energy transition is now at a “tipping point”, Van den Ende said, adding that 90% of all new electricity generation worldwide last year came from renewable sources such as solar or water.
“The transition is going very fast. Moreover, energy transition is now essential for Europe to reduce its dependence on the US. Money is all-important in this. With more capital from more people, we can achieve even more impact and solve problems together,” Van den Ende said.
