By Ian McConnell
Business Editor
AN Edinburgh-based asset manager has declared it has raised “the largest specialist circular economy private equity fund across the globe”.
Circularity Capital, which describes itself as a “circular economy growth investor”, has announced the oversubscribed final close of its second fund at €215 million (£181m) – noting this means its latest vehicle is three times the size of its £60m debut fund closed in 2018.
The fund manager said its Circularity European Growth Fund II had attracted “blue-chip institutional investors” including pension funds, insurance companies and family offices across Europe, the UK and North America, and fund of funds money.
It added that the fund would continue Circularity Capital’s dedicated strategy of investing in circular economy growth-stage businesses in Europe.
Circularity Capital noted: “The firm is focused on making investments into businesses whose circular economy characteristics are their source of sustainable competitive advantage. Target companies aim to decouple business growth from intense resource utilisation, generating both economic and environmental benefits. Example strategies preserve or extend asset lives, improve the utilisation of assets and/or enable materials and products to be used over multiple cycles.”
The fund manager, based in Charlotte Square in Edinburgh, noted its Circularity European Growth Fund I portfolio was “already responsible for 182,000 tons of aggregate portfolio CO2e (carbon dioxide equivalent) reduction from services sold, 38,000 tonnes of recycled materials manufactured, and 86 million meals saved since inception”.
A spokesman noted the meals saved reference related to “fund I portfolio company Winnow, which helps commercial kitchens to prevent food waste via AI (artificial intelligence) technology”.
Circularity Capital noted it had to date made eight investments from its first fund and two investments from its second vehicle.
It added that companies in which it had invested included ZigZag, an award-winning SaaS (software-as-a-service) platform for eliminating retail returns wastage, sold by Circularity to New York Stock Exchange-listed Global Blue in March 2021.
Circularity Capital was founded in 2015. Its founder partners include Ian Nolan, who spent 25 years at investment capital group 3i, during which time he held the role of chief investment officer with responsibility for managing £10 billion of funds across Europe.
David Mowat, who has spent more than 20 years working in senior positions within venture capital and private equity and worked at Caird Capital and Bank of Scotland Integrated Finance, is another founder partner.
The other founder partners are Andrew Shannon, who worked for private equity and venture capital fund manager Foresight with a focus on small and medium-sized enterprise investment, and Jamie Butterworth. Mr Butterworth is a former chief executive of the Ellen MacArthur Foundation, a global hub for circular economy innovation.
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