Fund Solutions

Algebris Fund Targets “Champions” in Green Transition

Private equity fund aims to raise €300 million to take advantage of “converging” transition trends and opportunities.  

Algebris Investments Green Transition Fund is targeting the creation of champions in focus sectors, including energy transition, circular economy, smart cities and agritech, the firm’s Managing Director, Luca Valerio Camerano told ESG Investor.

The Green Transition Fund recently added €70 million (US$77.19 million) from its latest fundraising round, passing €260 million through commitments from Italian and foreign institutional investors.

The private equity fund has a fundraising target of €300 million, which Algebris aims to surpass “in the coming months”. 

Camerano, Head of Algebris’ Green Transition Fund, said that the firm’s expertise in the industrial sector has allowed it to define an “original investment space” that includes several alternative verticals.  

He added that the fund is addressing an “untapped space”, describing its four focus sectors as “converging”. 

Camerano said that when the €300 million is raised 40% will be invested in firms supporting the energy transition, 40% in circular economy, and the remaining 20% in smart cities and agritech.  

The fund is classified as Article 9 under the EU’s Sustainable Finance Disclosure Regulation.  

Investment intentions 

The Algebris Green Transition Fund was launched in July 2022, with the objective of targeting companies that exhibit proven earnings potential, resilient business models and sustainable long-term strategies, assisting in their expansion, consolidation and internationalisation. 

The fund made its first investment in Italian industrial waste management solutions provider Omnisyst, taking a 70% stake in the company. According to Camerano, the solution will allow companies to include waste as a “new chapter of value creation” and ensure adequate management of the entire journey of waste, reducing business risks and costs.   

Founded in 1995 and headquartered in Milan, Omnisyst has revenues of approximately €40 million, EBITDA of €6.5 million and 30 employees across Italy.  

Camerano said Algebris is set to close “a couple” of new deals in the next six months, adding that the firm has so far reviewed approximately 200 companies for the fund. 

Algebris has €19 billion in assets under management, with the firm completing more than 41 deals worth over €4 billion over the last seven years, according to Camerano.  

At launch, Algebris was aiming to raise €400 million for the Green Transition Fund, but this has since been revised down to a figure that the fund’s Head calls “compatible with the targeted and achievable market”.  

“We do not just want to become big,” he added, “We want to be coherent with a compatible underlying market rather than having a simple abstract figure.” 

Camerano said that most of the companies the firm are targeting for the fund is what he would call “ESG native” – businesses that were created with the aim or specific purpose to address an ESG variable. 

He added that energy independence and material scarcity trends underlying the rationale for Green Transition Fund’s four focus pillars. 

Algebris also recently unveiled a new sustainable bond strategy that invests in fixed income securities that aims to generate a positive impact on the environmental and social standards of investee firms. 

Private equity perks 

The Green Transition Fund is a private equity fund, with Algebris aiming to take majority stakes in companies that meets its investment criteria. 

Camerano noted that as a private equity fund alignment between the investor, the entrepreneur, and the existing shareholders in the acquired company is vital.  

He additionally stressed the importance of direct dialogue and engagement with investee companies and the entrepreneurs behind them. 

“Speaking the same language is essential to generate value,” Camerano said. “The genuine alignment of interest in the long-term journey is what makes the difference.” 

He also flagged the different types of investor classes involved in the fund, including supernational, family offices, and banks, adding that this diversity reflects the “attractiveness” of its strategy to the market.  

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