The publication of The Global Cleantech Innovation Index 2017 by WWF and the Cleantech Group has thrown the spotlight on the world-wide impact of this sector – and provides an insight into the guiding principles of the OPEN Cleantech Equity Fund (OCEF).
The index ranks nations on a variety of factors including public R&D funding, access to private financing, innovation 'drivers', entrepreneurial culture, renewable energy infrastructure, late stage investments and exits covering 40 countries including all the G20 as well as emerging economies. The range of economic conditions around the world means that markets have different financial needs and present a variety of opportunities.
This is something that the OPEN Cleantech is very aware of, which is why we specialise in geographical and technological diversity, making use of experts with highly specialised local knowledge of markets and industries to evaluate our portfolio of investment companies.
The countries at the top of the Global Cleantech Innovation Index – led by the Nordic nations with the USA, Canada, the UK and Germany all in the top 10 – are mature markets where government backing for R&D has helped innovative companies reach a ready for market stage. Financial requirements here are quite different to those in countries further down the list, such as Italy (ranked 26) and Mexico (32) both held back by a lack of private investment, which is just the kind of opportunity OPEN Cleantech seeks for the OCEF.
Manuel Pulgar-Vidal, Climate and Energy Practice Leader, WWF International, says in the report: "We will need to see a shift towards a circular economy within planetary boundaries where energy comes from renewable energy sources.”. This off course gives the sector huge growth prospects in the coming years. He goes on to say that government agencies, investors, businesses and cities must work together to meet "the major innovation challenges ahead (which) include the acceleration of business models that take solutions to market and the continuous cost-cutting of key technologies."
This is the founding principle of the OCEF, which aims to maximise returns for investors by carefully selecting a portfolio of well-run companies that are bringing to market new technology that has the potential to make them leaders in their respective fields. Wherever possible government grants, loans and financial incentives are utilised. It is a win-win situation for the companies involved – who need our financial backing to bring their technology to market – and OCEF investors who take a share in the business and a cut of the profits and growth.
Initially OPEN has chosen nine companies that have access to proven processes and technology, ready to embark on their next stage of expansion. Equity investments in clean technology companies can generate above average short to mid-term capital growth. While the cleantech industry continues to grow and mature, funding along the entire cleantech value chain is expected to increase; it is estimated that a staggering $93 trillion is required for total global low-emission infrastructure by 2030.
This provides a major opportunity for investors willing to participate in the equity of high growth cleantech companies to create wealth for all stakeholders at the same time as helping to move the world to a sustainable future.
Cleantech is a title which encompasses a wide field of activities, including recycling, renewable energy (such as wind power, solar power, biomass, hydropower and biofuels), information technology, green transportation, electric motors, green chemistry, lighting, greywater – indeed all sectors that are aimed at being more energy efficient with a smaller environmental footprint.
The OCEF companies are placed around the world from Mexico to Italy, South Africa to the UK and the Netherlands, and so benefit from diversity in not just their products but also in regional economic/currency risk.
The fund is designed to make the most of the opportunities highlighted in The Global Cleantech Innovation Index[i] by using a highly flexible business model that can be adapted for local conditions.
Professional investors and institutions requiring further information about the OPEN Cleantech Equity Fund, please contact us for a copy of the Term Sheet and Listing Particulars.