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Asia’s first cleantech funds now raising capital

Preqin shows private-equity managers in Asia are beginning to participate in the worldwide boom of cleantech funds.

Perhaps the biggest trend in private equity right now is investing in cleantech, a term that refers to products or services that improve operational performance, productivity or efficiency, while reducing energy consumption, waste and pollution. And PE managers in Asia are introducing the region’s first dedicated cleantech funds, says Preqin, a London-based consultancy specialising in private equity and infrastructure. Click here for original article.

See also: Investment in Clean Energy Exceeded Fossil Fuel Investment in 2008

According to Preqin, there are now four Asia-based PE funds trying to raise capital for dedicated cleantech funds (see table below). The two largest are from Hong Kong-based First Vanguard, which is raising $500 million for the China and Pacific Rim Water Infrastructure Fund; and Singapore-based Middle East & Asia Capital Partners, which is raising $400 million for its MAP Clean Energy Fund.

There are two more players raising $250 million funds: in Singapore, Ant Global Partners is financing its Ant Global Partners Cleantech Fund; and in Malaysia, Abundance Venture Capital seeks capital for its AVC Abundance Energy Fund.

The first private-equity or venture-capital fund to include a cleantech focus, within a diversified portfolio, emerged in 2005 in India, where IDFC closed a $440 million infrastructure fund. Then in 2006, China’s Prax Capital closed a $153 million fund that included cleantech themes, as did China’s Northern Light Venture Capital, which closed a $350 million fund.

Since then activity has picked up: in 2008, funds in India, China and Hong Kong closed over $5 billion worth of diversified funds that included cleantech plays, while earlier this year, Singapore’s SEAVI Advent closed a $178 million diversified buyout fund.

Preqin says there are now at least 10 PE funds trying to raise capital towards themes that include cleantech, of which four are dedicated, as mentioned above. Together these 10 seek to raise up to $3.6 billion, with the four dedicated funds accounting for $1.4 billion of that.

Preqin has released a report on cleantech funds that shows huge interest among institutional investors and funds of funds. Despite the global financial crisis, overall cleantech fundraising remained steady in 2008, with 29 funds raising a total of $6 billion worldwide, roughly the same as was raised in 2007. The majority has gone to VC funds, with infrastructure funds also playing a big role.

In North America, funds this year seek to raise up to $9 billion, making this the biggest market, followed by European funds, which want to raise over $7 billion, Preqin says.

The consultants also find more than half of cleantech-focused VC firms prefer to take minority stakes, while buyout and infrastructure firms mostly prefer controlling stakes. For institutional investors, these funds represent the preferred means of accessing cleantech themes, as opposed to via the public markets, because the sector is too new to be well represented in the listed space.

Preqin’s 10 largest funds with a cleantech focus raised by Asian fund managers

Fund Fund Type Size (Mn) Vintage Fund Cleantech Focus Fund Manager Fund Manager Location
Baring Asia Private Equity Fund IV Balanced 1,515.0 USD 2008 Diversified Baring Private Equity Asia Hong Kong
IDFC Private Equity Fund III Infrastructure 700.0 USD 2008 Diversified IDFCPrivate Equity India
IDFC Private Equity Fund II Infrastructure 440.0 USD 2005 Diversified IDFCPrivate Equity India
LC Fund IV Venture (General) 400.0 USD 2008 Diversified Legend Capital Management China
Northern Light II Venture (General) 350.0 USD 2007 Diversified Northern Light Venture Capital China
Qiming Venture Partners II Venture (General) 320.0 USD 2008 Diversified Qiming Venture Partners China
Softbank China Venture Capital III Venture (General) 2,000.0 CNY 2008 Diversified SB China Venture Capital China
Nexus India Capital II Early Stage 220.0 USD 2008 Diversified Nexus India Capital India
SEAVI Advent Equity V Buyout 178.0 USD 2009 Diversified SEAVI Advent Singapore
Prax Capital II Expansion 153.0 USD 2006 Diversified Prax Capital China

Preqin’s 10 largest funds with a cleantech focus currently raising by Asian fund managers

Fund Fund Type Target Size (Mn) Fund Status Vintage Fund Cleantech Focus Fund Manager Fund Manager Location
ORYX-STIC Fund II Buyout 500.0 USD Raising 2009 Diversified STIC Investments South Korea
China and Pacific Rim Water Infrastructure Fund Infrastructure 500.0 USD Raising 2009 Pure Cleantech First Vanguard Hong Kong
Sandalwood Capital Partners II Early Stage 350.0 EUR Raising 2009 Diversified Sandalwood Capital Partners India
Ascent India Fund III Expansion 450.0 USD Raising 2009 Diversified UTI Venture Funds India
MAP Clean Energy Fund Infrastructure 400.0 USD Raising 2009 Pure Cleantech Middle East & Asia Capital Partners Singapore
AmKonzen Asia Water Fund Infrastructure 320.0 USD Raising 2009 Diversified AmKonzen Water Investments Management Singapore
Asia Strategic Capital Fund Mezzanine 300.0 USD First Close 2008 Diversified Asia Mezzanine Capital Group Hong Kong
Tripod Capital II Buyout 300.0 USD Raising 2009 Diversified Tripod Capital China
Ant Global Partners Cleantech Fund Venture (General) 250.0 USD Raising 2009 Pure Cleantech Ant Global Partners Singapore
AVC Abundance Energy Fund Natural Resources 250.0 USD Raising 2009 Pure Cleantech Abundance Venture Capital Malaysia

Source: AsianInvestor.net, 08.06.2009 by Jame DiBiasio

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Filed under: Asia, China, Energy & Environment, Hong Kong, India, Korea, Malaysia, News, Services, Singapore, , , , , , , , , , , , , , , , ,

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