Independent alternative asset manager Azora has launched a €250 million European Climate Solutions Fund to invest in European growth companies that provide solutions for the decarbonisation of real assets. Fernando Gómez Fortún, Investment Director for European Climate Solutions at Azora, told ESG Investor that the solution will concentrate on lower-to-mid-market companies with up to €10 million in normalised annual earnings that offer decarbonisation solutions across the three key themes of urban solutions, energy solutions and sustainable agriculture. Gómez Fortún said the fund will “focus on businesses that run operations with durable revenue profiles”. This means firms must have the ability to “scale in high-growth markets with secular tailwinds” and possess “proven business models with strong management teams that are eager to execute against a strategic plan with alignment on sustainability goals”. “We believe this segment of the market is underserved even though it is where most of the innovation is taking place”, he said. According to the European Commission, only 24% of European SMEs have specific decarbonisation plans despite accounting for more than 63% of total carbon emissions, which means there is “clearly an opportunity to support this segment with institutional capital”. “With this strategy, we want to provide our investors with the opportunity to benefit from a strong and secular tailwind and believe it offers a compelling proposition given our intention is to boost the growth of these businesses through both Azora’s and CBRE’s portfolio,” Gómez Fortún added. Azora European Climate Solutions Fund is labelled as an Article 9 fund under the SFDR classification and will have specific decarbonization targets and reporting obligations. The fund will target strategic minority or majority stakes in businesses that have proven business models in mitigating the effects of climate change and which need capital to scale.
