Hermes Private Equity Launches £125 Million Green Fund

(January 27, 2010) — As part of a British government scheme to invest in high-growth green tech firms, encompassing clean technology, low carbon and renewable energy, the UK government and Hermes Private Equity launched Hermes Environmental Fund, or HEF. It announced a first closing to begin investing the £125 million it has raised so far.

The government has provided £50 million of investment in HEF, while the £31.3 billion British Telecom Pension Scheme, the UK’s largest pension scheme, raised £75 million of private investment. It is seeking to raise £200 million by the end of 2010. The BT Pension Scheme owns Hermes Private Equity’s parent company Hermes Fund Managers.

“We can now start investing the fund at a time when the global downturn is producing a number of opportunities at attractive valuations,” said Hermes Private Equity chief executive Susan Flynn, according to Reuters. She added that during the next three years, the money is expected to be fully invested, mainly in private equity and venture capital funds.

HEF is a fund-of-funds to be managed by Hermes Private Equity and invested in underlying funds with a proven reputations in the environmental sector, reported the Wall Street Journal. At least half of the funds will be invested in environmental companies, and at least 50% of the overall investments will be in UK firms.