Press Release
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April 22, 2024

GEF Capital Partners completes final closing on $325 Million US Climate Solutions Fund II, exceeding original target

 

Press Release

GEF Capital Partners completes final closing on $325 Million US Climate Solutions Fund II, exceeding original target

GEF Capital Partners completes final closing on $325 Million US Climate Solutions Fund II, exceeding original target

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April 22, 2024

 
 
ARLINGTON, Virginia - April 22, 2024
 
GEF Capital Partners ("GEF Capital"), a Washington, D.C. based private equity firm focused on climate change and pollution mitigation, announced today the successful close of its GEF US Climate Solutions Fund II (the "Fund"). The Fund was met with strong investor demand and closed at $325 million of commitments, far exceeding its original $250 million target. The Fund focuses on making control investments in lower middle-market companies in the United States and Canada to rapidly scale their climate change and pollution remediation solutions.

Investors in the Fund include some of the leading and most forward-thinking institutional investors focused on climate change investing, including Blue Earth Capital, HQ Capital, ODDO BHF, INGKA Investments, GEM Investments, Första AP-fonden, Quilvest Capital Partners, Granite Capital Management, and Nordea.
 
"We are grateful for the support we received from a global and highly sophisticated institutional investor base seeking exposure to lower middle-market companies addressing climate change in the United States," said Daniel Prawda, Co-Founder and Managing Partner of GEF Capital. "We look forward to working with these investors to channel capital into companies providing innovative and cost-saving solutions for their customers to decarbonize and transition towards less expensive forms of renewable energy, as well as to find ways to maximize resource efficiency through the circular economy."
 
Recognizing the importance of supporting lower mid-market companies in the United States that are addressing climate change, Nicolas Muller, Managing Director at Blue Earth Capital, noted: "While a vast majority of climate change capital is being channeled to infrastructure and venture funds as well as mega buyout funds, we believe there is also a need to capitalize lower mid-market companies." He added, "Small-scale businesses are critical to the transition to a net zero and circular economy and require both capital and guidance from impact investors; we view GEF Capital as an ideal partner to support these businesses."
 
In addition to the Fund's closing, GEF Capital announced today the addition of two new leaders to its U.S. investment team. Eric Townsend and Radha Badani have joined GEF Capital as Operating Partners, further strengthening the firm's value-added approach to its investments.
 
Mr. Townsend is an industry veteran in operationalizing and growing climate-focused companies. He previously served for fifteen years as CEO of Bluesource, an environmental attribute project developer and market maker which raised and deployed over $2 billion into greenhouse gas remediation projects, conservation and credit generation. Bluesource was a portfolio investment made by the GEF Capital US Climate Solutions Fund I in 2018. The company was successfully exited to the TPG-Rise Climate Fund in 2022.
 
Ms. Badani brings over 20 years of marketing expertise to GEF Capital, spanning strategy, brand management, insights, and sales enablement. She previously managed flagship and new-to-market brands at the Clorox Company, led strategy and global insights at New Balance, and developed brand and marketing strategies for a variety of growth companies as a Partner and consultant at Chameleon Collective. While at Chameleon Collective, Ms. Badani provided strategic marketing and advisory support to some of the Fund's portfolio investments.
 
"Having Eric and Radha join our team allows us to continue with our 'partner-first' model in supporting innovative business leaders seeking capital and institutional know-how," said Stuart Barkoff, Co-Founder and Managing Partner of GEF Capital. "They come with a clear understanding of our investment philosophy and will deepen value creation and impact by providing sales, marketing, and operational expertise alongside our investment professionals and portfolio company management teams."
 
Having already completed six platform company investments, GEF Capital has developed a diverse portfolio of companies focused on energy efficiency, alternative energy, and electrification of transportation:
  • InSite - Based in Washington, D.C., InSite is a technology and knowledge solution for the built environment that operationalizes value from building data to optimize the performance of buildings. The company's data and engineering experts work across industries and government to transform insights into effective, tangible solutions that reduce energy use and carbon emissions by approximately 10 to 20 percent.
  • Lifecycle Renewables - Based in Boston, Mass., Lifecycle collects used cooking oil from over 6,000 restaurants and food service providers in the Northeast and converts it into a renewable heating oil called Truburn™ which reduces greenhouse gas emissions by 80% as compared to conventional heating fuels. Truburn™ is used by universities, hospitals and utility companies to attain Net Zero carbon emission targets in heating, and begin transitioning away from fossil fuel-based energy sources.
  • Murf E-Bikes - Based in San Clemente, Calif., Murf designs and manufactures electric bikes for rugged and responsible adventuring. According to a study conducted by Bike Radar, the usage of electric bikes results in a 95 percent reduction in CO2 per passenger mile emissions when compared to a gasoline powered automobile.
  • Polargy - Based in Mountain View, Calif., Polargy designs building products and solutions for data centers including hot and cold aisle containment systems, modular walls and structural ceilings. Polargy helps data centers reduce the amount of energy they use to cool servers by approximately 15 percent, which in turn boosts profitability and reduces carbon emissions.
  • Civic Renewables - Based in Bethesda, Md., Civic is a residential solar energy installation company. Through acquisitions that have expanded its geographic scope, Civic is quickly becoming a key partner for home solar power installation in the United States. As the cost for solar power declines and electric utility prices continue to rise, Civic seeks to make solar energy more accessible and help support the transition to low-cost clean energy.
  • Next Step Energy Solutions - Based in Littleton, Colo., Next Step is a provider of full service, turnkey LED lighting system retrofitting and tech-enabled energy efficiency solutions for asset owners and operators, with a primary focus on the healthcare, manufacturing and commercial real estate sectors.

"With a diverse portfolio of companies that are leading to real climate outcomes on a day-to-day basis, we are very proud of the investments that we have completed for the Fund," said Mr. Barkoff. "As private equity investors, it has been important for us to showcase that environmental outcomes, whether from the reduction of greenhouse gas emissions or other forms of harmful pollution, can result in strong financial and environmental benefits."

FirstPoint Equity ("FirstPoint") acted as lead placement agent to GEF Capital. Justin Bower, Co-Founder of FirstPoint, commented, "It's been an absolute pleasure working with GEF Capital, especially at a time when sustainable climate investment has never been more important. We're proud to have attracted a broad spectrum of pre-eminent, responsible investors."

Additional placement agent services were provided by Asante Capital, TritonLake and Impactus Partners. Latham & Watkins LLP served as legal counsel in the formation of the Fund.

About GEF Capital Partners:

GEF Capital Partners is a global private equity firm that that was established in March 2018 following a collaborative spinout from Global Environment Fund, an early pioneer in global sustainability and environmental investing. With offices in the United States, India and Brazil, and investments spanning the clean energy, energy efficiency, waste, water and resource efficiency sectors, GEF Capital invests in companies that have developed solutions to help address climate change and pollution mitigation. By partnering with management teams that operate in high-growth markets, GEF Capital brings a value-added approach to its investments to grow leading companies and ensure a more sustainable future. In the United States, the Fund's impact strategy and approach is highlighted in GEF Capital's 2023 Impact Strategy Report. More is available at www.gefcapital.com.

Video Link – US Climate Solutions Fund II Final Closing

 
 
 
Morgan Stanley Private Equity Solutions team provides investors access to broadly diversified and thematic multi-manager portfolios, co-investments, impact investing strategies and custom solutions.
 
 

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