Boutique hits target for circular economy fund

Private equity group Circularity Capital says there is money to be made as society transitions to a circular economy

An investment boutique with a fund investing in European “growth stage” small and medium-sized businesses has exceeded its £50m target fund size, closing at its £60m hard cap.

On Tuesday, Edinburgh-based Circularity Capital said it had surpassed the target for the Circularity European Growth Fund I, which invests specifically in businesses that are enabling a transition to a circular economy.

The company aims to invest in businesses which challenge the traditional “take, make and dispose” models of production and consumption. Family offices, institutional investors and major corporations are among the investors to have backed the fund so far.

“We firmly believe that our specialist sector focus and team structure is giving us an edge in identifying, sourcing and adding value to European growth SMEs,” Ian Nolan, co-founding partner of Circularity Capital, said in a statement.

“By using the circular economy as a lens to invest enables us to identify opportunities that drive financial value creation in parallel with measurable positive environmental and societal impact.”

In October 2017, the company announced the fund’s first investment in a food waste business called  Winnow, followed by an investment in German firm Grover, which offers flexible ‘access over ownership’ to technology products.

Jonathan Dean, a portfolio manager, at AXA Investment Managers said Circularity Capital is a “great fit” with AXA IM’s impact investing strategy.

“Of particular interest was the manager’s expertise in the circular economy, which is rapidly emerging as a scalable impact theme,” he said. “AXA IM was a cornerstone investor in Circularity Capital and we are delighted to see the fund close at its hard-cap.”