Wermuth Asset Management (WAM) has launched the Tatarstan Cleantech Fund (TCTF) and WAM can now draw against the EUR110m committed by the co-founders of the fund. Additional fundraising is underway, as WAM targets a total fund size of EUR200m.
TCTF is the first ever international cleantech fund with a specific mandate to focus on the needs of the Russian Federation, and the Republic of Tatarstan in particular. The Fund will look to address climate change and other environmental issues by investing in the best cleantech companies that offer technology of relevance to Tatarstan, and that could benefit by selling into or initiating production in the Republic.
The TCTF offers investors several distinct advantages: 1) with an energy intensity per unit of GDP eleven times higher than Germany, the economic benefit of applying clean technologies in Tatarstan and Russia is far greater than in developed countries; 2) an extremely attractive investment climate, thanks in part to a free trade zone that provides tax breaks to investors; 3) a preferred return to limited partners in the Fund for investments that involve the Republic; 4) finally, Tatarstan represents an excellent base from which to access Russian and other Eurasian markets.
The Fund has been seeded with EUR110m by its co-founders, the Republic of Tatarstan and WAM. The intention is to raise an additional EUR90m to reach the target fund size of EUR200m over the coming 18 months. The Fund is conceived for ten years: a six-year investment period and a four-year wind-down period, with targeted overall returns of 30% per annum. The Fund offers a 2x preferred return to non-Tatarstan investors whenever a deal leads to CAPEX in Tatarstan. The TCTF will invest primarily into medium and small-size companies from Russia, Europe and the United States, which have a proven track record in clean technologies and are looking to expand their business.
Wermuth Asset Management CIO and Managing Partner Jochen Wermuth, says: “With documentation and approvals now in place, we look forward to getting to work and demonstrating the substantial potential we see for investors to take advantage of the significant benefits Russia, and the Republic of Tatarstan, can achieve by utilizing and investing in clean technologies.”
The Lead Fund Partner Daniel Colbert, says: “I am delighted and honored to have the opportunity to lead an energetic and experienced team for the TCTF. I admire both the Republic of Tatarstan and WAM for recognizing the importance and value of clean technologies and their partnership in structuring the fund to achieve mutual and separate goals. I also see huge potential interest in the TCTF, not only from Russia-focused investors, but from cleantech investors around the world.”
The term sheet to establish the TCTF was signed in the presence of Chancellor Angela Merkel and President Dmitry Medvedev at the German-Russian government consultations on 19 July 2011 in Hanover.
