Private equity cleantech and renewable energy remains a booming sector on a global scale, with numerous investment opportunities arising from a worldwide desire to address the negative impact of human activity on the environment. The vast majority of private equity fund managers investing in cleantech opportunities are venture capital firms (77%), but a significant 12% of all managers involved in the sector manage infrastructure funds.
Cleantech and renewable energy infrastructure fundraising rose steadily from 2005 to 2007, with the number of funds doubling and aggregate capital raised trebling during this period. Cleantech infrastructure fundraising reached its peak in 2007 when eight funds raised over $1.5 billion in capital commitments. However, the financial crisis resulted in difficult fundraising conditions in 2009, and as a result, only three vehicles were closed raising $0.4 billion.
There are a further 25 infrastructure funds focused on the industry currently in market, seeking an aggregate $11.5 billion. Funds focused on European assets account for the both the majority of vehicles on the road and target capital, with 14 funds looking to raise $7.2 billion. In terms of capital sought, North America is the next most significant region with four funds targeting $2.4 billion, while there are seven cleantech infrastructure funds in market focused on Asia and Rest of World looking to raise $1.9 billion.
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