Apr. 23, 2024 at 3:35 pm

Two LGPS funds tap into climate venture capital

April 23, 2024no commentNo tags

Wiltshire and the UK Environment Agency pension funds have invested in a €300m European venture capital climate fund managed by World Fund.

Both Local Government Pension Scheme (LGPS) funds have invested in the venture capital mandate alongside other investors including, the European Investment Fund, German KfW Capital, BPI France and Croatian pension fund Erste Plavi.

The €300m of capital committed to the fund will be invested in 25-30 European startups building decarbonisation technologies, the World Fund explained. The fund has already made 15 investments in companies such as Planet A Foods and Space Forge.

Commitments by £3bn Wiltshire and the £3.6bn UK Environment Agency mark the pension funds first investments in venture capital. This comes as there has been a push from governments, particularly in the UK, for pension funds to invest in “unicorns”.

‍Danijel Višević, managing partner at World Fund, said: “We will work to ensure that our fund demonstrates to the world that successful investments and positive climate impact go hand-in-hand. In this way, we hope to provide a service to the entire climate investment sector.”

Wiltshire and the UK Environment Agency are both part of pooling vehicle Brunel Pension Partnership and have set targets to achieve net zero carbon emission across their portfolios by 2050 and 2045 respectively.

Recently, Wiltshire Pension Fund has made multiple moves when it comes to climate, notably confirming last year that it plans to divest from fossil fuels by 2030.

Speaking to Room151 in March, as part of tRoom151’s LGPS Podcast Jennifer Devine, head of the fund, explained that Wiltshire has branched out into a broad array of climate-focused private markets assets, including climate solutions.

Devine explained that Wiltshire is offsetting this exposure to relatively illiquid assets through a “salami” strategy including investments in highly liquid assets.