Wednesday, 9 December 2009

Hermes to head cleantech UKIIF

Hermes Private Equity is managing a new £125m cleantech fund-of-funds anchored by UK government money.

The fund is one of two in the UK Innovation Investment Fund (UKIIF) scheme. The brainchild of science minister and erstwhile tech entrepreneur Paul Drayson, UKIIF aims to attract more institutional money into early-stage venture capital for UK tech companies. The business ministry BIS has put up £150m to anchor the fund, and has attracted a further £175m in its first close.

Hermes will be backing VC funds investing in the low-carbon and cleantech sectors, from seed to early stage. It has an initial £125m fund, including £50m from government.

The European Investment Fund will meanwhile manage an initial £200m fund, including £100m of government money, to invest across the ICT, life sciences and advanced manufacturing sectors. Both appointments are subject to contract.

Investors and tech transfer professionals in the tech start-up and spin-out space have welcomed the scheme, first announced in June. Rather than making direct investments (a strategy of limited effectiveness, which can potentially crowd out commercial VCs), the UKIIF is using public money to try and catalyse private sector investment.

In his pre-budget report, chancellor Alistair Darling also announced a string of initiatives to support domestic energy efficiency and electric vehicles. The BBC news has outline details.

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