E.ON’s climate focused VC team eyes €100m first close

Future Energy Ventures - armed with an anchor commitment from E.ON - is targeting €250m for its first comingled fund

Future Energy Ventures, a decarbonization-focused venture capital firm, expects to hold a first close on €100 million by the end of the year on its way to a target size of €250 million, founder and managing partner Jan Lozek told New Private Markets.

FEV is raising a commingled fund for the first time; since 2016 it grew a circa €250 million portfolio of investments for energy giant E.ON, which has anchored the new fund with a €40 million commitment. The 15-strong team has made more than 50 investments and had 10 exits, which have delivered a realized 2.2 multiple of invested capital and an IRR of 39 percent, the firm said in a statement in August.

New Private Markets caught up with Lozek this week. Aside from the expected first close, he told us the following:

  • Even amid the mini-boom of decarbonization-focused investment strategies, Lozek feels FEV stands out based on its track record. “There aren’t too many teams that have experience in this area,” he said. The fact that FEV has made more than 50 investments is, he believes, “outstanding and strong”. The relative paucity of experienced investors in this space is something we have covered before.
  • The firm has put a more formal structure around its measurement and reporting of impact; it has partnered with Berlin-based carbon management company Planetly on ESG data management. It has also honed its approach to assessing and measuring the short and long-term impact portfolio companies will have on CO2 emissions, and the potential to make an impact in this area is now a formal part of its investment decision-making. “Put simply,” said Lozek, “no environmental impact, no investment.”
  • In a segment previously dominated by strategics, the arrival of a new breed of investors has Lozek feeling ambitious for returns (“Obviously we can’t promise it to investors, but I believe 5x is truly possible”). He pointed to two investments in FEV portfolio companies that illustrate the arrival of mainstream capital: Brookfield Asset Management’s investment in Thermondo (an installer of CO2-neutral central heating systems) and Lightspeed Ventures investment in Buildots, an AI company serving the construction sector.