ETF closes Environmental Technologies Fund III on £167m

Katharine Hidalgo
10 July 2020

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ETF Partners has closed its third-generation Environmental Technologies Fund on ТЃ167m.

The fund began raising in 2018 towards a £150m target. It held its first close on £150m in October 2019. The fund had a hard-cap of £200m.

"We've had many inbound requests to reopen the fund for commitments since the close," said Zoë VanderWolk, ETF's head of investor relations.

She continued: "The coronavirus, if anything, has triggered more interest in our funds because it has accelerated the trends we invest in, which are digitalisation and sustainability."

VanderWolk said the fund's management, carry and hurdle rates are in accordance with market standards.

The fund's predecessor closed on £80m in 2014 and is now fully deployed.

Since its foundation in 2006, ETF has exited two companies: Enablon and MWR. VanderWolk told Unquote the firm is considering exits for a number of other portfolio companies currently.

ETF did not use a placement agent.

Investors
Around 40 existing and new LPs, including British Patient Capital and the European Investment Fund, participated in the fundraise. British Patient Capital provided a cornerstone investment of £20m. Asahi Mutual Life Insurance Company, Hermes GPE, KfW and Singapore Power also invested in the fund.

"Around 20% of the fund is made up of corporate venture investment," said VanderWolk.

While the fund did not have a minimum commitment, some sustainability-driven family offices committed around £1m.

The geographic breakdown of the LPs by commitments is about 50% hailing from Continental Europe, 30% from the UK, 10% from Asia and the remainder from the rest of the world.

The GP commitment to the fund was 2.25%.

LPs in the fund's predecessor include the Clwyd Pension Fund, Asahi Mutual Life Insurance Company and Hermes GPE, with commitments not exceeding £5m.

Investments
Investing at series-A and in follow-on rounds and with the capital to support companies through multiple funding rounds, ETF Partners' third fund has already invested in companies in fields such as e-mobility, cybersecurity, microbiome artificial intelligence and software, and energy-efficient data centres.

Typical equity cheques from the fund range from £3-10m.

The fund has made 12 investments and is around 33% deployed.

People
ETF Partners - Patrick Sheehan (managing partner); Zoë VanderWolk (head, investor relations).