Business & Money | Tuesday 12 January, 2016 6:21 am |

Wermuth Asset Management (WAM), specialising in impact investments, is launching another private equity fund, with a focus on European growth companies within the area of resource efficiency and renewable energy. “In the Middle East the Green Gateway Fund 2 is directed towards institutional, HNWI and Family Offices who wish their investments to be not only climate friendly but also, at the same time, to generate attractive returns,” says Jochen Wermuth, Chief Investment Officer of WAM, who will be speaking at the World Future Energy Summit (WFES) 2016, on the 20th January 2016 in Abu Dhabi. 

 

The fund’s target size is EUR 250 million, within individual investments of between EUR 5 and 30 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.  These might include, for example, companies from 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, with its many years of international experience, as they expand into the world’s growth markets, such as the Middle East. 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. “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,” says Jochen Wermuth. “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, 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. After just three years, the estimated value of the fund’s portfolio is now 2.6 times invested capital, based on third-party offers for the portfolio companies. Among the fund’s holdings is Aquarion Water Group, an international provider of advanced water systems, solutions and technologies. Through its business locations in Germany, Italy and the UK, the company follows a buy-and-build strategy as it constantly expands its own portfolio of businesses, most recently through the acquisition of MFT GmbH, a German company specialising in membrane filtration technology. 

 

The fund’s second portfolio company, The Mobility House, is one of the leading electromobility providers in Europe, which has rapidly expanded from its original business of recharging stations and installation services to also offer energy solutions. The company has established cooperation arrangements with various car manufacturers and energy providers, such as Daimler und GETEC, to build out recharging station networks and to make intelligent use of batteries for energy storage.  In the view of Wermuth Asset Management, these “technologies of the future” will become ever more important as the global energy revolution takes place. 

 

The third company, Primekss based in Latvia, has developed into one of the leading Northern European builders of industrial concrete floors. Its technology enables it to construct joint-free, crack-free concrete floors of any size using up to 40 per cent less concrete than conventional floors, thereby reducing the floor’s CO2 footprint by 160kg per cubic metre. Primekss is working to expand its business into new markets in infrastructure and building construction, as well as to grow internationally. 

 

Finally, OTI Greentech specialises in sustainable cleaning, recovery and waste treatment solutions primarily for the oil and gas industry, with an established base of international customers including not only leading producers but also ship operators. The company, with headquarters in Switzerland, has three business segments: Maritime Solutions, Energy Solutions and Industrial Solutions.