German-based Wermuth Asset Management (WAM) has launched a private equity fund focused on European growth companies within the area of resource efficiency and renewable energy.
The family office is looking to raise €250 million for the vehicle, its second such offering. Green Gateway Fund 2 will look to write €5 million to €30 million equity cheques to back assets in sectors including renewable energy, electromobility, electric power storage and smart grid technology.
It will be managed by Jochen Wermuth, Casper Heijsteeg and Michael Ludwig, who already oversee Fund I. The average holding period is expected to stand at between four and five years.
“The environment for growth investments in Europe continues to be extremely favourable. In recent years, there has been a stronger investment emphasis on the buyout sector,” said Wermuth in a statement. “Valuations in the growth sector thus remain particularly attractive, in part also because Basel III has caused banks to reduce lending to these growth companies.”
The firm claims that Fund I is currently valued at about 2.6 times invested capital, based on third-party offers for the companies it holds in its portfolio. These include water treatment business Aquarion Water Group, electromobility provider The Mobility House, industrial concrete floor maker Primekss and oil waste management firm OTI Greentech.
The vehicle targets net cash-on-cash returns to investors of 2.5 times, according to a 2013 presentation seen by Infrastructure Investor.