Strategies / Green GateWay Fund (ETCF)

The fund acts as a highly effective and value-added partner for cleantech entrepreneurs - not only by providing finance but also by providing additional industry expertise, experience in building companies and access to business and political networks. Most significantly, the fund seeks to assist investee companies by helping to facilitate their access to the large and rapid growing Russian market, where this is appropriate.

The economic rationale for the application of European technologies in Russia is compelling. For example, Russia currently consumes 10x more energy per unit of GDP than Germany. Recognising the scale of the opportunity, Russia's resource rich region Tatarstan committed €100 million to ETCF. Tatarstan, which has the best business climate in Russia according to Forbes and Ernst & Young, represents an effective springboard for companies to reach the rest of the Russian market.

The fund's investments would typically be in the range of €5 to 25 million (in multiple rounds). Larger amounts can potentially be arranged directly with the fund's investors. The fund seeks to take minority or control positions, typically as lead or co-lead investor.

ETCF's investment criteria are:

• strong management team
• addressable market of over €300 million or rapidly growing market/niche with substantial barriers to entry
• Leader or potential leader in the respective industry or market niche
• absence of or little technology risk
• strong intellectual property
• commercial revenues and clear path to profitability
• opportunity for the investment adviser to add value

ETCF is run by one of the world's leading and most experienced cleantech investment teams

 

ETCF History

With the Green Gateeway Fund (ETCF), WAM is returning to its roots and investing directly to support promising clean technologies. The first direct investments made by the WAM family office in 2000 went into two clean tech projects: one with investor Dr Ziegler, on systems to derive energy from water flows; and one with Nobel Prize-winning scientist Alexander Mikhailovich Prokhorov, who was working on an integrated sand-to-silicon-wafer system to produce solar energy at a fraction of current costs.

The experience taught us some valuable lessons. We discovered that lots of expertise, lots of time and a strong balance sheet were required to advance even outstanding projects. And we found that competitors who felt threatened by new technologies were keen to buy patents (so they could lock them away in a drawer), and would also try to lure away good staff. We therefore decided that we needed more AUM in addition to our own capital to be able to push forward changes that would lead to a more sustainable and more resource-efficient economy.

To do this, in 2003, WAM set out to turn its successful vehicle focusing on listed debt and equity into a fund that could make up to 20% private investments, and raised its first outside capital. By 2006, WAM's strong track record allowed it to raise its first closed-end fund, which invested up to 40% in private investments and the rest in listed second-tier stocks. A second closed-end fund allowed to make up to 80% private investments followed shortly afterwards.

WAM advised these funds on some $25 million of direct investments into clean technologies ranging from flywheel energy storage to plasma technology for diesel engines to wind power to a forestry business operating under FSC guidelines. Bolstered by the addition of two clean tech specialists in 2010, WAM's strength and experience in private equity was further enhanced in 2012 by partnering with up with E2 cleantech, a Dutch clean tech fund that over the years has invested in five earlier stage projects in the Netherlands.

The Green Gateway Fund (ETCF) is a logical next step that combines two of WAM's greatest strengths: passion for and expertise in clean tech, and in-depth knowledge and huge experience of Russia. The fund offers growth-stage clean tech companies access to a fast growing market with high potential impact. Russia consumes ten times more energy per unit of GDP than Germany. The opportunity for clean technologies is as obvious as it is vast.