European LP Briefs, September

Wermuth Sources Tatar Fund

German family office Wermuth Asset Management has appealed to investors to support a new €200 million ($286 million) fund for clean technologies in the Russian republic of Tatarstan, 800 miles to the east of Moscow.

After a €100 million ($143 million) contribution from the republic and €10 million ($14 million) from Wermuth, the fund still requires €90 million ($129 million).

“We will invest in the world’s best clean technology companies, help them enter the Russian market and, eventually, set up production in Russia,” Wermuth founder Jochen Wermuth told Reuters.

Three-quarters of the fund will target foreign companies, though Wermuth said that three Russian companies, operating in solar power, plasma technology and waste management, have also been identified so far.

The fund aims to offer foreign companies access to the Russian market and improve energy efficiency and industrial waste management in Tatarstan, a major oil producer and center for heavy industry.

Lift-off for Big Society Capital

The United Kingdom has launched Big Society Capital (BSC), an independent organization designed to support social investment, with a £1 million ($1.6 million) commitment to the Private Equity Foundation.

Though the PEF’s core mission—to improve youth employment and education through grants—is charitable, future BSC investments will be made for both financial and social returns.

Sir Ronald Cohen, founder of sustainable growth investor Bridges Ventures, will chair the BSC for an interim period.

“The social sector now has the prospect of attracting funding in the U.K. to support social entrepreneurs, much as venture capital and private equity did to support business some three decades ago,” said Cohen at the BSC’s launch.

German Institutions Prefer Sustainable Investment

Almost two-thirds of German institutional investors favor sustainability criteria when investing, according to a report by Union Investments, a Frankfurt-based asset manager.

The survey of 218 large-scale investors, covering an asset base of €1 trillion ($1.4 trillion), also found that most adopters of sustainability benchmarks did so principally to enhance their image.

However, another new report, by Allianz, claims that sustainably managed portfolios generated 1.6% better returns between 2005 and 2010.

Nonetheless, the Union survey found that German pension funds, banks and insurers were more likely to ignore sustainability.

In contrast, these types of long-term investors in other European countries are thought to be main supporters of sustainable investment.

Unsurprisingly, perhaps, a majority of churches and endowments in Germany pay close attention to environmental, social and governance ratings when investing.

Ireland Details Enterprise Support

Funds backed by Enterprise Ireland (EI), the state body responsible for encouraging the growth of Irish businesses, invested €42 million ($60 million) in 74 companies during 2010.

Software and life sciences accounted for the bulk of the investment, while early stage funding received almost two-thirds of the €80 million ($114 million) invested since the start of EI’s 2007-2012 venture capital program.

Additional investments were made in 2010 under EI’s 2000-2006 program.

“I have repeatedly said that if we are to get out of [Ireland’s economic] crisis, we have to vigorously promote indigenous innovation. One crucial part of my plan is promoting the development of a thriving venture capital industry here,” stated Richard Bruton, Ireland’s minister for jobs, enterprise and innovation.

Despite the minister’s support for EI, the organization’s report also showed that almost a third of the investment by funds it has backed since 2007 went to companies based outside Ireland.

As part of its 2007-2012 program, EI is a limited partner in nine funds, of which the most active in 2010 were Seroba Kernel Life Sciences Fund II, which invested €9.7 million ($13.9 million); and Dublin-based Delta Partner’s Equity Fund III, which invested €6.7 million ($9.6 million).

Compiled by Alex Derber