Sectors & Activities/Corporate Finance

Only a few years ago sustainable investment frequently involved untested technology and was the preserve of large utilities with strong balance sheets and brave equity investors. That is now changing. Green has never been a more popular colour for today's savvy investors.

Opportunities in sustainable investment encompass a wide range of sectors; each with their own strengths, development drivers and growth potential. However, the core sectors with the best short to medium term investment potential are generally recognised to be biofuels and biomass, renewables (especially wind and, more recently solar), waste recycling, energy from waste schemes and clean technologies such as fuel cells.

Far from being the niche investment area it once was, sustainable investments are attracting seasoned investors from across the spectrum. City stalwarts such as Jupiter, Merrill Lynch and New Star have launched investment funds focussing primarily on quoted opportunities in the sustainable investment sector. The banks are also taking up project finance opportunities in the sector as well as more corporate finance supported lending opportunities.

A number of funds have recently been launched specifically focussing on the equity investment opportunities in the unquoted end of the market. They include a venture capital offshoot launched by the Carbon Trust, a low carbon fund backed by a £20m investment from ABN Amro, and two funds established by our own clients, Foresight Venture Partners, the Foresight Sustainable UK Investment Fund, which is aimed at unquoted growth situations in sustainable markets in the UK, and Foresight 2 VCT plc, which targets a broad range of companies focussing, in particular, on clean energy and environmental technology.

Sustainable investment looks set to experience considerable and continued growth in the future. With progressive government policies, favourable tax regimes and a wide scope of investment opportunities, sustainable investments can offer an attractive option for the green investor.

We advise a variety of equity investors, banks and entrepreneurs and companies in relation to the legal structuring of their finance arrangements in this area.

Roger Blears, Senior Partner
Head, Corporate Finance
T: 44(0)870 763 1555
E: roger.blears@martineau-uk.com