The UK Innovation
Investment Fund is off the ground with the first closing of the
£125m Hermes Private Equity environmental innovation fund.
It’s taken only 7 months for UKIIF to launch the first of two
funds, the Hermes Environmental Innovation Fund, which has already
raised £125m and will continue to seek further funding from
investors.
The Environmental Innovation Fund, managed by Hermes Private
Equity, will now start investing in low carbon and clean
technology funds and co-investing in companies, providing much
needed venture capital to help these innovative businesses grow.
The Hermes Fund will focus on investment opportunities aimed at
increasing the efficient use of resources (both renewable and non
renewable) at all stages of production and consumption.
Over the past decade, the UK has emerged as a European
frontrunner in alternative energy investment and is well
positioned to further develop a sustainable market competitive
globally. The Hermes Fund will look to benefit from this
attractive market framework and expects to commit its capital over
the next 2-3 years.
The Prime Minister, Gordon Brown MP, said
“The UK has a wealth of innovators and entrepreneurs seeking to
create the businesses of tomorrow – businesses that will make the
UK a world-leader in low carbon innovation and industry, and help
to tackle some of the biggest challenges we face around energy and
climate change. This fund will provide substantial investment
where it is needed and deliver strong returns for
investors."
Science & Innovation Minister, Lord Drayson said:
“Investment has flowed into the UKIIF at extraordinary speed.
It's already one of the largest European funds for
investing in high-tech firms. But what's more important
is rapidly channelling that capital into Britain's
burgeoning green tech sector. After a tough spell, things are
looking up for our entrepreneurs and innovators.”
Energy and Climate Change Minister David Kidney MP said:
“Cleaning up our energy supplies and improving energy efficiency
will give the UK the opportunity to develop the low carbon
industries of the future. This new fund will help the UK to build
on existing strengths in the sector and enable British companies
to demonstrate and commercialise these technologies.”
Hermes Private Equity CEO Susan Flynn commented:
“Increased awareness of environmental issues and policies to
tackle climate change presents a real opportunity for investors
and the innovative companies we will invest in. At this stage in
the economic cycle there are many forward-looking companies who
may not have funding available to them. The Hermes Private Equity
Environmental Innovation Fund (HPEEIF) will ensure that those
seeking finance for promising new environmental ventures will have
access to a source of funding.
We have already identified a number of attractive investment
opportunities and anticipate that HEIF will begin to deploy
capital shortly.”
The UK Innovation Investment fund was announced last June by the
Prime Minister as part of the Government’s strategy for Building
Britain’s Future. Hermes Private Equity and the European
Investment Fund were confirmed as fund of fund managers for two
separate funds of funds. Backed by £150m investment by the
Department for Business, Innovation and Skills, the Department of
Energy and Climate Change and the Department of Health, it has
already attracted private investment to more than match this
amount with the total first closing of £325m.
The UK Innovation Investment Fund will drive economic growth and
create highly skilled jobs by investing in businesses where there
are significant growth opportunities. Independent research *
estimates that the global market for low carbon and environmental
goods and services (LCEGS) was already worth £3 trillion in
2007/08 and could grow to an estimated £4.3 trillion by 2015.
According to figures from the Carbon Trust, the UK is now the
sixth largest low carbon and environmental economy in the world
with 3.5% of global market share. This brings annual economic
benefits and investment to Britain of £6-8 billion.
The UKIIF will target small growing businesses, start ups and
spin outs including pre-profit and pre-revenue stages of development.
Evidence shows that venture capital-backed companies
significantly out perform other companies in terms of their
ability to create wealth and generate the spill-over benefits
including export performance and the creation of high skilled jobs
vital to the economy. **
Notes to Editors
1. The UK Innovation Investment Fund was launched on June 29.
Hermes Private Equity and EIF were announced as the two fund of
fund managers for the UKIIF on 9 December 2009.
2. Hermes will be launching a new fund of funds, the HPE
Environmental Innovation Fund using £50m of UKIIF funding
alongside commitments of £75m from private sector investors
creating an initial pool for investment of £125 million
3. The Fund will particularly focus on pooled investment funds
that invest in United Kingdom opportunities. It will provide
investors with the opportunity to invest in both funds and
co-investments in businesses with high growth potential, primarily
focusing on the environmental sector.
4. Negotiations and financial allocations were made by Capital
for Enterprise Limited (CfEL) a professional asset management
business owned by the Department for Business, Innovation and
Skills (‘BIS’). The business is managed by an independent Board of
Directors, drawn from across industry and finance, and has 15
full-time expert staff as well retaining specialist consultants
and other professionals as required.
5. Hermes Private Equity is a wholly owned subsidiary of Hermes
Fund Managers Limited and has been operating private equity fund
of funds since 2000. It has over £2bn under management, as at 30
September 2009. The team has extensive experience of investing in
alternative investments and over the past 10 years HPE has
committed to over 100 funds in the UK, Continental Europe, USA and
Asia, investing in early stage venture through to large buyouts
and infrastructure.
6. * Source – Innovas 2009.
7. ** Source – British Venture Capital Association DATA 2008 –
the economic impact of private equity and VC in the UK.
Department for Business, Innovation & Skills
The Department for Business, Innovation and Skills (BIS) is
building a dynamic and competitive UK economy by: creating the
conditions for business success; promoting innovation, enterprise
and science; and giving everyone the skills and opportunities to
succeed. To achieve this it will foster world-class universities
and promote an open global economy. BIS - Investing in our future.
Contacts:
BIS Press Office
NDS.BIS@coi.gsi.gov.uk