Clean Growth Fund has raised approximately $110 million in commitments for its second climate technology fund, taking Fund II beyond half of its $202 million target. The fund will invest in 25 early-stage UK climate technology companies from Seed to Series A, targeting a 20% net internal rate of return. Border to Coast anchored the latest close with a $30.3 million commitment, while participating pension funds collectively represent about $161 billion in assets across 18 UK Local Government Pension Scheme funds.
Key Overview
- Clean Growth Fund II has reached approximately $110 million in commitments.
- The fund has a target size of $202 million.
- Fund II aims to support and scale 25 UK climate technology companies.
- The fund targets a 20% net internal rate of return.
- Border to Coast committed $30.3 million to anchor the latest close.
- Strathclyde Pension Fund added approximately $13.5 million, bringing its total Fund II allocation to about $40.7 million.
- The participating pension funds represent 18 UK Local Government Pension Scheme funds with combined assets of around $161 billion.
Pension Capital Backs UK Climate Innovation
Clean Growth Fund has raised total commitments for its second climate technology fund to approximately $110 million, strengthening the flow of British pension capital into domestic decarbonisation ventures.
The second close takes Fund II beyond halfway toward its $202 million target. The vehicle invests in UK companies from Seed to Series A whose technologies could reduce emissions and support green economic growth.
Fund II is also designed to deliver commercial performance, with a target net internal rate of return of 20%.
Border to Coast Anchors Fund II Close
Border to Coast’s UK Opportunities Fund anchored the latest close with a $30.3 million commitment.
Strathclyde Pension Fund added about $13.5 million, bringing its total Fund II allocation to approximately $40.7 million.
Islington Pension Fund and East Riding Pension Fund are also investors.
The second close was also described in sterling terms, with a GBP 22.5 million commitment from Border To Coast Pensions Partnership’s UK Opportunities Fund and a further £10 million from Strathclyde Pension Fund, increasing its Fund II commitment to £30 million.
Border to Coast’s UK Opportunities Fund represents 18 Local Government Pension Scheme partner funds and targets long-term adjusted returns while backing investments that help drive UK economic growth.
Fund Targets 25 Climate Technology Companies
Clean Growth Fund II aims to support and scale 25 companies developing technologies focused on climate and resource efficiency.
The fund has already invested in four startups working across areas including batteries, food, heavy industry and buildings.
Founded in 2020, Clean Growth Fund invests in Seed and Series A UK-based climate technology companies developing innovations aimed at significantly reducing greenhouse gas emissions or improving resource efficiency.
The firm said it follows a place-based investment strategy, backing climate innovation from established science and investment centers including Oxford, Cambridge and London, as well as emerging hubs across the UK.
Institutional Investors Back UK Climate Tech
The fund’s institutional investors manage around $161 billion in combined assets across 18 UK Local Government Pension Scheme funds.
The latest fundraising highlights the role of institutional pension capital in supporting early-stage climate technology businesses while seeking financial returns.
Beverley Gower-Jones OBE FEI, Founder and Managing Partner of Clean Growth Fund, said:
“Increasingly, major institutional investors are looking to UK climate tech for exactly what it offers – strong long-term returns alongside real economic growth right across the country.”
The fund’s approach combines climate technology investment with its commercial return objective, targeting companies capable of scaling technologies that support emissions reduction and resource efficiency.
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Fund I Invested in 19 UK Startups
Clean Growth Fund’s first fund invested in 19 UK startups.
The firm said those investments are on track to abate 27m tCO2e per year by 2030.
Fund II is building on this investment strategy by targeting 25 additional companies across areas of climate technology and green economic growth.
The current portfolio includes startups working on batteries, food, heavy industry and buildings, demonstrating the range of technologies being considered under the fund.
Border to Coast Sees Climate Tech Opportunity
Keith Angood, Portfolio Manager at Border to Coast Pensions Partnership, said:
“Border to Coast’s UK Opportunities Fund targets investment into high-quality UK companies and assets that can deliver attractive returns whilst contributing to economic growth and development across the UK. Clean Growth Fund II strongly matches these objectives, providing exposure to innovative UK businesses operating in a growing sector, managed by an experienced team with a proven track record.”
The commitment reflects the investment objectives of the UK Opportunities Fund, which seeks long-term returns while supporting investments contributing to economic growth and development across the UK.
Outlook
Clean Growth Fund II has now secured approximately $110 million toward its $202 million target, giving the fund more than half of its targeted capital. With institutional investors providing significant commitments, Fund II is positioned to continue investing in early-stage UK climate technology companies. The fund plans to support and scale 25 companies, while targeting a 20% net internal rate of return. Its existing investments across batteries, food, heavy industry and buildings provide the initial base for the fund’s wider climate technology strategy.
FAQs
1. How much has Clean Growth Fund II raised?
Clean Growth Fund II has secured approximately $110 million in total commitments, taking it beyond half of its $202 million target.
2. How many companies will Clean Growth Fund II invest in?
The fund aims to support and scale 25 early-stage UK climate technology companies from Seed to Series A.
3. What return is Clean Growth Fund II targeting?
Fund II is targeting a 20% net internal rate of return.
4. How much did Border to Coast commit to Fund II?
Border to Coast’s UK Opportunities Fund committed $30.3 million to Fund II, anchoring the latest close.
Sources: ESG News, ESG Today, Renewables Now
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