Spanish asset manager Azora announced on Thursday that it is launching a new private equity vehicle, Azora European Climate Solutions Fund, FCR, seeking to raise €250 mln of capital commitments.
The fund will take a pan-European approach in providing growth capital to lower mid-market businesses (defined as companies generating up to €10 mln in EBITDA) that are based in Europe and provide decarbonisation solutions for the real economy. The strategy is centered around three key themes: urban solutions, energy solutions and sustainable agriculture. Azora will seek to invest the capital across 10-12 portfolio companies, with average ticket sizes ranging between €10-40 mln.
Azora expects it will be able to leverage its €6.5 bn platform to identify businesses in a proprietary way and accelerate their growth within the broader Azora portfolio. In addition, Azora will also leverage the services of CBRE’s European platform to further expand its pipeline identification and value creation capabilities.
Azora European Climate Solutions Fund is labelled as an Article 9 fund under the SFDR classification and will therefore have specific decarbonisation targets and reporting obligations. The fund will target strategic minority or majority stakes in businesses that have proven business models in mitigating the effects of climate change and which need capital to scale.
Azora has already made two investments under this strategy: the acquisition of a strategic stake in ISFA, a Spanish company that has developed a sustainable almond farming practice; and the most recent investment in Abatable, a London-based carbon procurement and market intelligence technology company that helps businesses connect and transact with carbon project developers to offset their carbon emissions.
Santiago Olivares, managing partner of Azora’s Energy, Infrastructure and Sustainability practice, commented: ‘The fight against climate change has created a historic investment opportunity to provide capital for companies that provide a solution towards decarbonising the real economy. With the launch of this strategy, we want to provide our investors with the opportunity to benefit from a strong and secular tailwind and believe our strategy offers a compelling proposition given our intention is to boost the growth of these businesses through both Azora’s and CBRE’s portfolio.’
Concha Osácar, Founding Partner of Azora, added: 'Our European Climate Solutions strategy is another step that demonstrates our commitment with sustainability, reaffirming Azora’s position as a value-add partner for investors and businesses which have specific sustainability objectives.'
