Investment Profile
Sectors
We seek out opportunities to partner with superior management teams and established businesses in the four target sectors:
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Resource Efficiency: Products and services that allow customers to achieve the same economic output with lower inputs of scarce resources and have attractive ROI/payback periods. Sectors include energy, water, waste, transport, agriculture, and built environment
- Consumer Sustainability: Companies that produce or sell consumer products that are as good or better value than existing offers, and also have a lower environmental footprint
- Renewable Energy: Companies across the value chain that contribute to the generation of energy from renewable natural resources, particularly small hydro, wind, biomass, and waste.
- High Return Infrastructure: Real assets in energy, water and waste yielding fund level returns above ~20% IRR. Opportunities include operating teams that are positioned to replicate a proven business model, distressed or undervalued assets that can be aggregated to increase returns, assets in locations with high availability of a renewable resource, high market prices, and companies that can self-finance capital expansion on the back of long-term contracts.
Our portfolios are diversified amongst sub-sectors and balanced geographically
Geographies
- VGF I: North America, Europe and Israel
- VGF Emerging Markets: Central and Eastern Europe, Turkey, Russia and other Commonwealth of Independent States countries
Investment Strategies
- Growth Stage SMEs and Mid-Cap Buyout: High-growth companies that are either market leaders or potential market leaders and are positioned to grow faster than underlying GDP. The targets will be deploying proven business models into international markets, or successfully growing high return infrastructure asset portfolios. We typically seek companies with $10 - $150 million in revenues.
- Theme Based Investing: The Team uses theme based sourcing built on proprietary research for target sectors. The thematic research informs proactive engagement of regional and international networks and cold-call target lists to originate investment transaction.
- Returns and Investment Size: The team seeks appropriate risk adjusted private equity returns based on the underlying project and market conditions. The Emerging Market Fund has access to a debt facility at the Fund level, a financing option that is particularly useful for infrastructure investments. Target investment size is $10 to $35 million, and we have co-investor appetite to consider transactions up to $75 million. Target hold period is 4 to 5 years.
- Lead & Control: The Fund always leads, and has a bias for controlling positions. Minority positions with strong rights are considered opportunistically if the Team can strongly influence commercial success and reliable exit.
- Nexus of Unique Capability: The Team combines (i) strong regional execution, (ii) both growth stage and infrastructure investing discipline, (iii) global sector specialist knowledge, and (iv) deep emerging market principal investment experience
- Target Company Management Teams: Target companies are led by an existing strong management team with equity alignment.
- Risk Management: Capital preservation is a priority. The Partnership uses a country risk matrix and strategic relationships to evaluate and manage exogenous risks. Company-level risks are managed through entry valuation, structured instruments, and active board participation. The Fund has a robust social and environmental risk management framework.
Investment Charter
We seek investment opportunities that will match our Investment Charter:
- Invest in companies whose products and services reduce net greenhouse gas emissions and/or improve management of scarce resources, operate in environmentally and economically sustainable markets, and have a long-term positive impact on their communities and society more broadly.
- Conduct business with our partners in a way that is open, equitable, collaborative, and based on trust.