Foresight Group, a leading independent alternative asset manager, has launched the Foresight Environmental Fund, a private equity fund, that will invest in recycling and renewable energy projects in London. The move comes in support of the London Green Fund and is in line with the Mayor of London, Boris Johnson's commitment to work with the city to secure London's pre-eminence as the world's leading low carbon financial centre.
The Mayor, officially launched the fund at a Low Carbon Capital event on Monday 21 March. The fund's investment programme promises to divert large volumes of municipal, commercial and other waste from landfill each year by investing in small-scale waste-to-energy and recycling plants, which promote sustainable and carbon neutral economic growth, and simultaneously create employment opportunities in the capital.
Foresight aims to raise a total investment of £200 million from different quarters to support the programme, which includes £100 million from the banking sector; £35 million from the London Green Fund, which has already been secured; another £35 million earmarked from pension funds and similar investors; and the remaining £30 million coming from Foresight's other funds.
Speaking to CIWM on the reasons behind Foresight's interest and support for the London Green Fund, Matt Taylor, partner, Foresight Group, said: "We have been investing in recycling and waste to energy for the last 5 years, so we recognised a very close fit with the London Green Fund in terms of investing in local scale facilities to make the most value out of waste materials. That fits with Foresight's vision and gives us a chance to extend what we are already doing."
According to Matt, the fund will make equity investments in attractive companies that aim to put new capacity on the ground in London for treating and recycling waste. Explaining the process involved in the identification and selection of its investments, he said: "We are looking for business plans from companies that would like to raise equity to build or expand their facilities. And we'll judge those, as we do for any equity investment, by weighing its relative merits. For instance, assessing the markets, management competence and the nature of technology used."
Sharing his opinion on the way the waste and recycling market is currently positioned and the potential revenue it can generate, Matt said: "If I had to put a figure on it I think it would be around £7 billion. Broadly, that is the kind of money we generate to get rid of waste, owing to the ever increasing landfill taxes and other waste services. However, this is being replaced by newer methods like recycling, which will over a period time result in a large chunk of waste management revenue shifting to the recycling arena."
Commenting on the potential benefits that stand to be exploited, the Mayor, said: "A century ago London was cashing in on carbon, but I am determined we now harness the wealth of investment opportunities coming from the shift away from the use of increasingly costly fossil fuels. The prize is not only better environmental stewardship and cash savings, but the injection of billions of pounds into the city's economy and tens of thousands of high quality jobs. In addition, the move towards energy efficient transport, homes and workplaces will deliver a better quality of life.
"London's existing lead as a low carbon financial centre means we are well placed to grab more than our fair share of the global market in associated goods, services and skills. This multi-million pound fund to provide greener waste and recycling facilities is a great example of the type of innovative thinking that will stimulate low carbon economic growth for the capital."