Vala Capital, the entrepreneur-led venture capital firm, has launched the Vala Sustainable Growth EIS (enterprise investment scheme) targeting small companies focused on sustainable solutions.
The launch comes with an ever-increasing demand from investors wanting funds focused on sustainable strategies. A recent survey of high-net-worth investors by Vala and WealthClub showed that 77% believe small, innovative companies have a major part to play in tackling sustainability challenges. Some 60% of investors surveyed said Environmental, Social and Governance (ESG) played a part in their investment decisions.
The Vala Sustainable Growth EIS will consist of up to 10 companies and will focus on three themes:
Technology for planetary health: technologies mitigating climate change;
Consumption and commerce: food, packaging and the circular economy;
Access to social needs: health, education and water.
It will apply five sustainable investment filters before making an investment. These include whether the business will deliver a positive impact on making humanity more sustainable, and whether the company can meet sustainability reporting requirements.
The Sustainable Growth EIS will be managed by a four-strong investment team, including fund manager Max Middleton and Vala’s CEO and founder Jasper Smith. The investment team will be supported by a group of experienced investors, seasoned entrepreneurs and sustainability advisers, including renowned climate change expert Dr Gabrielle Walker and Mike Penrose, founder of The Sustainability Group. The group will help identify opportunities and will provide strategic support together with hands on mentoring for all portfolio companies.
Max Middleton, fund manager, says: “Investors putting capital to work in start-up and small businesses today are the key to driving meaningful, sustainable change. There is an opportunity for venture capitalists to step in – to help sustainable start-ups grow, become profitable and secure our future by creating a cleaner, healthier and more sustainable society.”
Vala aims to raise £20m for the new EIS, which will start investing before this year’s end-of-tax year deadline.
There are no initial fees for the investor to pay (these are paid by the investee company). There is an annual management charge of 1.5 per cent and a performance of 20 per cent performance fee on profitable gains in excess of 110% of the acquisition costs.