Zouk raises €230m clean-tech fund, prepares infrastructure fund

20 June 2011

One of Europe’s biggest clean technology funds reached a final close today, with €230 million ($300 million) committed.

Private equity fund manager Zouk Capital said the original fundraising target for the Cleantech Europe II fund was €200 million, indicating strong investor demand. According to Zouk, Cleantech Europe II is the largest dedicated clean-tech growth equity fund in the region.

Launched in 2006, London-based Zouk already manages two other clean-tech funds, its €88 million earlier private equity fund, Cleantech Europe I, and a €52 million solar project finance fund, zSOL. The close of Cleantech Europe II brings the fund manager’s total assets under management to €370 million.

Zouk is planning to announce a second infrastructure fund “probably within weeks”, Samer Salty, chief executive of Zouk, told Environmental Finance. Whereas zSOL invests only in solar projects, such as seven Italian solar farms, the new fund will invest more widely, across renewables and environmental infrastructure, he said.

Salty called the fundraising a “milestone” for the fund manager and for the sector in Europe. “The scale of this fund creates a game-changing opportunity to support companies and to let our investors benefit from the impressive growth in clean-tech,” he added.

Cleantech Europe II will invest in expansion-stage companies in renewable energy, energy efficiency, water and waste technologies, Zouk said. It will target the UK, German-speaking countries, the Nordic countries, France, Belgium, the Netherlands and Luxembourg.

Zouk noted that five of the 10 investment professionals on its technology team, which will manage the fund, are native German speakers, giving it an edge because of the region’s “leadership in clean-tech innovation and commercialisation”.

Salty told Environmental Finance that the fund will seek to invest €10 million- 20 million per company, over the life of the company. It will focus on companies that already have a good revenue stream, with tested technologies.

The fund has already made its first investment to set up an energy efficiency and microgeneration firm that caters to the UK market. Zouk put an undisclosed amount into Anesco, alongside the other lead investor, the British utility Scottish & Southern Energy. Anesco effectively builds on a business unit of SSE, inheriting its team, customers and revenue stream, Salty said.

In August last year, Zouk made a partial exit from one of its portfolio companies, when Nordic Capital bought a 70% stake in silicon slurry recycler SiC Processing. At the time, Zouk said the sale produced a “return multiple which strongly validates its European growth capital investment strategy”.

Jess McCabe