Wermuth Asset Management (WAM), a company specialising in impact investments, is launching Green Gateway Fund 2, another private equity fund, with a focus on European growth companies within the the fields of renewable energy, electromobility, electric power storage and smart grid technology.
The average holding period should be in the range of four to five years. The portfolio companies will, moreover, be actively supported by Wermuth Asset Management as they expand into the world’s growth markets.
The fund’s target size is €250 million (US$172 million). The fund will make investments of between €5 and €30 million (US$3.4 and US$20.6 million) into portfolio companies which demonstrate high growth potential and which, on the basis of proven business models, stand to make significant contributions to energy and resource efficiency.
The fund’s management team will consist of senior fund partners Jochen Wermuth, Casper Heijsteeg and Michael Ludwig, who already manage Green Gateway Fund 1. Jochen Wermuth said:
“The environment for growth investments in Europe continues to be extremely favourable. In recent years, there has been a stronger investment emphasis on the buyout sector. Valuations in the growth sector thus remain particularly attractive, in part also because Basel III has caused banks to reduce lending to these growth companies.”
With the launch of Green Gateway Fund 2, Wermuth Asset Management seeks to build on the success of Green Gateway Fund 1, whose four portfolio companies have, on average, been growing at a rate of 30% annually since investment entry and, in just three years, quadrupled their income.
Jochen Wermuth, Chief Investment Officer of WAM, said:
“Green Gateway Fund 2 is directed towards institutional investors who wish their investments to be not only climate friendly but also, at the same time, to generate attractive returns.”
With the launch of Green Gateway Fund 2, Wermuth Asset Management seeks to build on the success of Green Gateway Fund 1, which likewise focuses on financing European growth companies and supporting them through as they reach commercial maturity.
The first fund is currently invested in four portfolio companies which have, on average, been growing at a rate of 30 per cent annually since investment entry and, in just three years, quadrupled their income. The estimated value of the fund’s portfolio is, after just three years, now 2.6 times invested capital, based on third-party offers for the portfolio companies.