The Rise of Environmental Funds in the Downturn

As the dust is beginning to settle, it is promising to see environmental funds rising from the maelstrom and leading the charge in sustainable and responsible investing.

London-based fund is expected to take advantage of downturn to invest in solar, agriculture, and waste-to-energy.

A new venture capital fund is launching in early 2009, with the goal of raising $5 billion in the next five years to invest in energy security and climate change.

London-based Earth Capital Partners is spearheaded by former Man Group chief Stanley Fink. The fund is expected to be run by Rufus Warner, formerly of Close Investments.

The group's first funds are expected to focus on solar, waste-to-energy, agriculture, and new technologies. Later funds are planned for infrastructure, forestry, carbon trading and energy arbitrage.

The environmentally focused fund has reportedly secured $250 million in seed investment. Earth Capital Partners expects to attract institutional investors such as pension
funds.

The company said environmentally focused funds are finding it easier to raise money than other funds.

The fund is awaiting government approval.

Other major funds have launched in recent weeks with the expectation that environmental technologies could perform better than other investments during the economic downturn (see Cleantech funds worth $1.9B lead the week).

Among them, U.K.-based Aviva Investors announced plans to raise a €500 million ($625 million) fund for cleantech investing in Europe (see Aviva creates €500M fund for European cleantech). London-based investment firm Climate Change Capital announced that it plans to invest in China for the first time, setting aside RMB 5 billion ($732 million USD) to take advantage of deals during the economic downturn (see Climate Change Capital plans $732M for Chinese cleantech).

And venture capital investment fund CMEA Ventures has launched a $400 million late-stage fund focused on alternative energy.

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