IP Group PLC (LSE:IPO), the LSE-listed science and technology investor, has launched a new fund with Australia's Clean Energy Finance Corporation (CEFC) to back cleantech companies targeting hard-to-abate industries.
The IP Group Climate Catalyst Fund has a target size of up to A$150 million, with IP Group contributing A$30 million and the CEFC A$20 million as cornerstone investors at first close.
The fund will target seed and Series A investments across industrial processes, including cement, steel and chemicals, mineral processing, heavy transport, energy-efficient data centres, agriculture and land use, and dispatchable energy and grid balancing.
IP Group Australia's existing cleantech portfolio includes Hysata, which is developing what it describes as the world's most efficient hydrogen electrolyser; Electralith, an innovator in lithium extraction and refining; Optigrid, an asset optimisation platform for grid-scale batteries; and Banksia Minerals Processing, which is developing a novel copper refining process.
The launch adds to IP Group's existing Australian operations, which include a A$435 million mandate for Hostplus, one of Australia's ten largest superannuation funds.
Greg Smith, chief executive of IP Group, said the fund "strengthens IP Group's ability to back the breakthrough technologies that will define the next era of decarbonisation".
He added that it represented further evidence of the group's strategy to grow institutional private capital under management alongside a recently announced relationship with Aberdeen in the UK.
Malcolm Thornton, CEFC head of growth capital, described the fund as targeting a "$30 to $50 trillion global decarbonisation opportunity" by investing in Australian-emerging climate technologies.
Alistair McCreadie, IP Group Australia chief investment officer, said hard-to-abate sectors account for more than 30% of global greenhouse gas emissions and "represent the next frontier" for decarbonisation investment, adding that "achieving material emissions reductions will require the largest reallocation of capital in modern history."