France’s Eurazeo targets €750m for green fund

French private equity firm Eurazeo aims to raise a minimum of 750 million euros ($813.08 million) for a buyout fund focused on companies supporting ecological sustainability, an executive told Reuters on Thursday.

The Eurazeo Planetary Boundaries Fund draws its inspiration from the scientific concept of ‘planetary boundaries’, which set limits for factors like pollution and biodiversity loss crucial for Earth’s habitability.

Guided by these principles, the fund will target investments in small to mid-sized companies (SMEs) dedicated to the regenerative and circular economy or facilitating the transition to a climate-friendly future.

Primarily concentrating on European firms, the fund will prioritise sectors like agriculture, waste management, and low-carbon energy. Additionally, 20 per cent of the fund’s carried interest will be tied to achieving impactful outcomes at the portfolio level.

This initiative aligns with the European Union’s push towards a circular economy, marked by reduced material consumption and increased recycling. Sophie Flak, Managing Partner at Eurazeo, emphasised the readiness of companies and the economy for this transition, highlighting the potential of innovative solutions addressing planetary boundaries.

The fund will receive support from an advisory board comprising sustainability experts such as former European Environment Agency head Hans Bruyninckx and Canada’s former minister of environment and climate change Catherine McKenna, among others. Their role includes guiding investment decisions and assessing their impact against the nine planetary boundaries.

Post-investment, the fund will engage in a thorough analysis of each company, working with management to develop binding progress plans lasting 12–18 months. Flak emphasised the importance of both financial performance and impact assessments, conducted annually.