Energy fund builds momentum

THE head of the £20m Energy and Environmental pot of the £185m North West Fund has said that he hopes to follow up its only deal to date with 2-3 more by the end of the year.

Adam Workman of CT Investment Partners, which has managed the fund since its launch in January, said that the investments would be in targets that will demonstrate the scope of its interests.

For instance, one will be in a service provider, one will be in a company developing a new green technology, and the third will be in a small-scale energy generation project.

“We’re on a good track for the year end,” he said. “If we do one of each it will give people a good idea about the spread of investments we’ll make.”

Workman said that investments in service providers can range from equipment installers through to consultancies providing advice on energy use to companies, while the investment in manufacturing companies will usually be in ventures with new “IP-rich” technologies.

He argues that the Energy & Environmental part of the North West Fund will typically make fewer, but larger, investments than sector specialists.

The North West Fund is investing sums of between £50,000-£2m in regional companies requiring growth capital, but it will typically invest £200,000-£1m in individual companies (often through multiple funding rounds) while energy projects are more capital-intensive and often require minimum upfront investments of £1m-£1.3m.

In both cases, it will often invest as part of a syndicate. The one deal it has completed so far is an example of this. It put in £400,000 to Runcorn-based fuel cell maker Acal Energy in June, but this was part of a broader fundraising round during which the company raised £6.1m.

“If we build a portfolio of 15-20 investments over the next five years I think we’ll do OK,” he said.

CT Investment Partners was started in 2002, initially as an arm of the Carbon Trust specialising in green technology investments. It was spun out from the Trust in 2006 and has subsequently raised more than £160m for 25 different UK green tech businesses.

“We’ve invested in 60 different industries and institutions over the last yen years, Most of those have been outside the North West. In fact, most have been outside the UK.”

The company’s headquarters is in London, but it has an office at Birchwood Park in Warrington from which its North West Fund team is based.

Workman said that CT Investment Partners had been looking at opening a North West division prior to an invitation to pitch for the role of managing the Energy and Environmental Fund.

He had helped to co-author a report, The Rise and Fall of Clean Energy Investment, which mapped the clean tech sectors across Europe and the US and had identified the North West as an area where there had been under-investment.

“We figured that we can’t keep talking about this, we have to do something about it.”

He argues that some of the major opportunities the sector is for firms supplying burgeoning number of wind farm operators – both onshore and offshore.

“There are lots of good, solid North West businesses in this space with opportunities for growth overseas.”

He added that the UK was was at the forefront of Europe’s offshore energy resource, in a similar way as it had in the North Sea oil market in the 1970s.

The companies forming part of the supply chain now, he argued, could find further opportunities on the Iberian peninsula, in the Nordic region and further afield in future years.