Evolution One has already raised some R400-million, and by July 2009, the ten-year private equity fund was targeted to grow to R1-billion.
Managed by Inspired Evolution Investment Management, the group was focused on building strategic partnerships, and on sourcing proprietary and appropriate technologies for application in the Southern African Development Community (SADC) region, across a variety of investment projects.
“Having raised R400-million from our core international investors, namely the International Finance Corporation, Catleway Properties, the Swiss Investment fund for emerging markets, and the Finnish fund for industrial cooperation, we are now targeting a second round of international and local investors,” said Inspired Evolution Investment Management executive director Dr Zuko Kubukeli.
The Evolution One fund planned on making from about ten to 15 investments over a period of three to five years in the SADC region, and would focus on cleaner energy and the environment, aiming to generate an internal yearly rate of return by focusing on eight sectors and sub sectors.
These sectors were: clean energy generation and energy efficiency; cleaner production technologies and processes; air quality and emissions control; water quality and management; waste management; agribusiness and forestry; natural products, organics and natural health; and sustainable buildings and environmental real estate.
Inspired Evolution executive director and principal Christopher Clarke affirmed that there was a compelling argument for a fund of this nature, focusing on cleaner technology (clean-tech).
In 2007 alone, $150-billion was invested into clean-tech, excluding Africa and Latin America, with an immediate term growth of 30% year-on-year predicted, which was second only to the health sector. Investment into clean-tech was forecast to exceed $226-billion by 2016 from private equity and venture capital alone.
“So on the back of that extraordinary growth, and considering the very strong strategic partners that we have – it is a compelling opportunity for us to combine those assets with the opportunities here. There is a compelling value proposition for a funder, and private equity is the best position to engage in that opportunity,” Clarke said in an interview with Engineering News Online.
Higher energy prices, resource security, climate change, rapidly developing countries, technological improvements, enabling government policy and incentives, tighter laws and regulations, emerging market growth, ‘first-mover’ advantage, proprietary deal sourcing networks, access to intellectual property, and social equity through innovation and small, medium-sized and micro enterprises were all aspects driving the uptake and desire for cleaner, ‘greener’ technologies.
Although not having made an investment to date, the R1-billion fund would consider investing in projects either in the start-up or early phase, and some later stage projects, or expansion projects. The minimum investment was R10-million, and the maximum investment R150-million, with a minimum equity participation of 25% and a maximum equity participation of 75%.
The Evolution One team had its eye on a number of projects to become involved with, such as thin-film solar manufacturing, retail goods from recycled industrial waste, co-generation, and electric vehicles, among others.
Evolution One’s investment philosophy was based on the concept of additionality, whereby accelerated development and use of clean technology products, services, and processes, provided superior performance and lower costs, and also reduced environmental and climate change impacts.