LWARB to set up circular economy private equity fund

The London Waste and Recycling Board (LWARB) has announced that it is to invest up to £3 million into a private equity fund that will support ‘venture-stage or growth-stage businesses that will help accelerate the move to a circular economy in London’.

LWARB to set up circular economy private equity fund

The board has said that the new fund‘s focus is likely to be on ‘innovative waste management technologies’, and may also emphasise ‘less capital-intensive, asset-light business models in the wider circular economy sector’. These might include business models that keep products in use for longer (i.e. through reuse or remanufacturing), or those that incentivise the return of products (i.e. hire/lease and product-as-service business models).

To qualify, investees will need to have ‘a London geographical emphasis’ in terms of either job creation, investment, customer concentration or waste sourcing.

The actual amount of capital committed by LWARB will depend on the size and investment criteria of the fund in question, taking into account ‘diversification considerations and potential co-investor structures’.

‘Helping businesses with high growth potential to get off the ground’

Announcing the fund yesterday (4 August), Richard Tracey, Chair of LWARB, said: “London is growing and we will need increasingly to find innovative ways of preventing waste and dealing with unavoidable waste.

“With this fund we hope to continue supporting the development of infrastructure and businesses in London, and also accelerate the move to a circular economy in the capital. It’s this kind of approach which will reinforce London’s position as a global hub of expertise and job creation in this emerging sector.”

Melville Haggard, Chair of LWARB’s Investment Committee, added: “We are looking forward to engaging with fund managers interested in co-developing this fund. Building on our past experience of financing waste infrastructure projects in London, we are confident that this new finance product addresses the needs of early stage ventures, helping businesses with high growth potential to get off the ground.”

The board has said it will conduct a period of consultation with potential providers in order to prove the concept, and develop views on the optimal fund structure.  

The fund marks LWARB’s latest investment into London’s green economy as part of the board’s remit to ‘transform the management of waste in the capital’. The board has previously contributed £18 million to the London Green Fund, launched in 2009, and over the last four years has directly invested in a number of waste infrastructure projects in London, including: Plasrecycle, the UK's first dedicated plant for recycling post-consumer plastic films; TEG Biogas, an anaerobic digestion and composting facility; and Ecotech, a PET bottle reprocessing and material recovery facility.

Find out more about LWARB’s investment framework for 2015-2020.

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