Institutional investors are jumping into the clean-technology sector, even as private equity executives warn there might not be enough deals to go around.
Institutions committed close to $1 billion to clean technology during the 18 months ended Sept. 12, according to the Investor Network on Climate Risk, a Boston-based organization of investors and financial institutions that focuses on the investment risks and opportunities created by climate change. At the same time, venture capital and other private equity fund managers are creating new funds and investing existing ones in clean-technology companies.
But private equity executives worry that the rush of capital will soon overwhelm the number of available deals. What's more, rising deal prices could cut into returns.
The $221.3 billion California Public Employees' Retirement System, Sacramento, has a $200 million target to private equity funds that invest in clean-technology ventures, and has invested $500 million in global clean-technology stocks.
The $153.2 billion California State Teachers' Retirement System, Sacramento, committed $188 million to the sector; the Oregon Investment Council, which invests for the $56 billion Oregon Public Employees Retirement Fund, Salem, has committed $50 million; and the $140 billion New York State Common Retirement Fund, Albany, committed $30 million.