SWEDEN - The AP7 Swedish buffer fund, Sjunde AP-fonden, said it is planning to invest SEK3bn (€319.2m) in environmental technology in the next three years via two fund of funds mandates.
"We will go public with the tenders for these funds of funds sometime at the beginning of next year," said Richard Gröttheim, AP7's executive vice-president.
Half of the total investment will be made through a fund of funds covering Sweden and the Nordic markets, while the remaining assets will be invested via a global mandate covering the US, Europe and Asia, he said.
In the last six years, AP7 pointed out, energy authorities in the Nordic region have invested a total of between SEK1bn and SEK1.5bn in the industry, so AP7's investment will mean a doubling of the amount of capital available to the sector in this region.
"We are making the investment primarily to enable 2.5 million savers to get an even better return on their savings," said Gröttheim, "and it is fortunate that the environmental industry benefits too".
The fund said it believes Swedish environmental technology businesses are among the best in the world, and many of them were now looking for new capital in order to expand. "Because of this we expect the returns to increase dramatically," said Gröttheim.
The funds of funds would invest in private equity companies from a broad investment universe within the environmental technology sector, he said but this should include new technologies in waste, water and energy efficiency.
Within the global mandate, there would be no specific geographical focus, he said, but added: "The US and UK market has been very dominant, so they will be included, but the rest of the EU and Asia is growing."