BlackRock, Nestlé and Lego holding company Kirkbi back the circular economy spree

Closed Loop Partners, a private equity and venture capital firm focused on the circular economy, has closed its debut buyout fund at $200 million.

Among the Leadership Fund’s investors are accounts managed by BlackRock, Nuveen, Danish real estate investor Realdania, and a number of corporates, including Kirkbi (the holding company with 75 percent ownership of the Lego Group), Nestlé, Microsoft, PepsiCo, Unilever and SK Geo Centric.

The fund will invest in recycling plants and technologies supporting recycling systems “to keep packaging, organics, electronics and apparel out of landfills”, according to a statement released by the firm. “Increased circularity is critical to advance more sustainable production systems and more efficient use of natural resources,” said Kirkbi’s head of circular plastics investments, Damir Hamzic, in the statement.

Several circular economy-specialist funds have joined the market recently. Circularity Capital closed its second fund at €215 million in April. Circulate Capital, focused on reducing ocean plastic pollution, is targeting $80 million for its second fund after raising $106 million for its debut. Regeneration.VC closed its first fund in March at $45 million with capital from a number of public figures including Leonardo DiCaprio. And the European Circular Bioeconomy Fund closed at €300 million in February. These are venture capital funds; the Closed Loop Leadership Fund is notable as a buyout strategy.

“There are strong tailwinds of consumer demand, cost-savings and resiliency driving the shift away from a linear economy,” BlackRock’s head of private equity investments, Lynn Baranski, said in the statement. “Closed Loop Partners has the expertise, thought leadership and differentiated execution ability to help capture the opportunity of this shift and drive positive economic, social and environmental outcomes through its investments.”

“As an early investor in the Closed Loop Leadership Fund, one of our key goals was to drive increased investment in circular supply chains from the financial community as we continue our work to help create a waste-free future,” Nestlé’s technical packaging director Chastity McLeod said in the statement. “We are thrilled to see the growth and impact of the fund since its launch and are proud to close the fund with such a diverse group of investors that will help scale the solutions needed to advance a circular economy.”