High costs taking wind out of clean-tech sails
19.04.2010, Pensions & Investments: Funds' need for more time, money proving hindrance
Clean-tech investing, which has grown 83% in only a year, is set to collapse under the weight of its unsustainable business model, some industry observers predict.
Private equity funds with a clean-technology focus increased fourfold to 105 in 2008 from 28 in 2004, according to the just-released Cleantech Review, a report from London-based alternative investment research firm Preqin.
During the same period, assets raised in funds dedicated solely to clean-tech investment jumped to 32 funds raising $6.4 billion in the peak year of 2008 from $200 million raised by nine pure clean-tech funds in 2004.
Some 77% of the clean-tech funds are run by venture capital companies.
But investors and fund managers are beginning to realize that clean-tech investments need more money than the managers or fund syndicates can afford. Clean-technology companies also are taking longer to mature than the lifetime of the typical venture capital fund.