Let’s Keep it Clean: Technology

By Richard Rapacki Jr. from Brighton House Associates

The analysts at BHA have continued to see an increase in the number of private equity investors with a specific interest in the clean technology sector. This has been the case since early last summer when exploding oil prices made clear the need to develop clean sources of energy on a large scale in a short time frame. More recently, from the beginning of January through mid-March, nearly 20 percent of private equity investors interviewed have expressed interest in the clean technology sector.
Last week, the percentage increased from 20 percent to over 30 percent. While this increase cannot be explained by any specific market trend, it does highlight the fact that clean tech is an up and coming area and many investors have identified it as such. A good example is a European fund of private equity funds that is looking for clean tech, U.S.-focused, venture capital funds. It feels that there is huge opportunity in this sector and it wants to get into the space sooner rather than later.
Analysts have also noticed that several investors are open to hearing from private equity funds with any strategy provided they have exposure to or are focused on clean technology. Another fund of private equity funds in the U.S. specifically said that its main focus is exposure to the clean technology sector and that its strategy search took a backseat to that. This is different from the past when investors usually narrowed their investment focus by strategy first and then by sector.
As the world continues to deplete the Earth’s precious natural resources, the effects will be felt not only by consumers and corporations but also by investors in and managers of private equity funds that believe there is an opportunity to capitalize on clean technology.