Growth investor EV Private Equity is in market seeking $350 million for its sixth fund, according to a source with knowledge of the firm. EV VI will be the first fund in the firm’s history to tie impact to carried interest.
EV, formerly known as Energy Ventures, will invest Fund VI into lower-mid-market companies that use technology to contribute to a reduction in global greenhouse gas emissions.
The fund has a target “impact pledge” of a net reduction of 1 million tonnes of CO2e over a 10-year period, as calculated using its own impact quantification method, dubbed “EV IQ”. According to a document seen by New Private Markets, The EV IQ method weighs up the total carbon footprint of each portfolio company (scopes one to three) then nets that off against emissions reductions it manages to effect among its clients and their value chains. If the latter outweighs the former, the net impact is its contribution to reducing global emissions.
If the fund fails to hit its total emissions reduction pledge, then the GP will forfeit 25 percent of its carried interest. Forfeited carry is diverted to purchase carbon credits.
According to EV’s website, its “target is to deliver a substantial and meaningful impact per dollar invested, and similar to financial metrics validation…impact achievements will be assessed by a third party on an annual basis.”
EV started as Energy Ventures in 2002 investing in technology companies operating in the oil and gas business. It has offices in Norway (Stavanger), Scotland (Aberdeen) and the US (Houston).
The firm started marketing Fund VI at the beginning of the year and is understood to be expecting a first close in Q3 of this year. EV declined to comment on the fundraise.