Blue Earth Capital, a Switzerland-based impact firm established by the founders of Partners Group, has led a continuation fund transaction involving the transfer of two venture capital assets.
Blue Earth backed a process that saw RockPort Capital Partners, a Boston-headquartered venture capital firm investing in alternative energy, mobility and sustainability, acquire stakes in two portfolio companies from its 2008-vintage RockPort Capital Partners III and move them into the RCP III Continuation Fund, per a statement.
The transaction involved agriculture technology company NewLeaf Symbiotics and battery intelligence software provider Qnovo, the statement said, noting that the continuation fund will allow RockPort to manage their next stages of growth.
Existing investors in RCP III fund were given the option of liquidating their holdings or reinvesting into the continuation vehicle on a full or partial basis. LPs of the $450 million RCP III include the Environment Agency Pension Fund, Lemelson Foundation, The Heinz Endowments, UC Investments and The John Merck Fund, according to data from affiliate title Private Equity International.
“GP-led deals are typically more appealing to impact investors like us, as they allow for the implementation of best-in-class impact frameworks, such as SFDR Article 9… [they allow] us to selectively acquire assets with the highest impact potential,” Nicholas Muller, managing director and head of funds and co-investments at Blue Earth Capital, told affiliate title Secondaries Investor.
Across secondaries more broadly, Blue Earth is seeking assets with potential for “significant positive impact, and even accelerated impact during our ownership”, he said, adding the firm sees “significant potential in both Qnovo and NewLeaf and [we] are excited to have entered this partnership with RockPort”.
Blue Earth, established by Partners Group founders Urs Wietlisbach and Alfred Gantner and wholly owned by the Blue Earth Foundation, has seen rapid growth since it rebranded from PG Impact in 2021, New Private Markets reported in November. The firm reached more than $1 billion in AUM earlier this year – surpassing the $800 million by 2024 target it had announced in 2021. It closed its second credit fund last month above target on $108 million. Climate Growth Fund I, launched in early 2021 with a $300 million target, held a first close on $145 million in November 2021.
The firm’s transaction comes at a time when impact secondaries have emerged as a nascent subsector in the larger secondaries market. The need for dedicated capital in this space has been growing, Muller noted during a panel at NPM’s Impact Investor Global Summit London 2023 in May.
“We definitely see [that] as the impact market is growing on a primary basis, the secondary market is following,” Muller said at the time.
“Traditional secondary players typically have an aversion for both venture capital and/or emerging markets, which have been two very large pockets of the impact investing space. We see a need for specialised impact investors to provide solutions on a secondary basis, both LP stakes and GP stakes.”
Panelists said the sectors boasting the best impact secondaries opportunities included climate, health and wellbeing, food and agriculture, water, circular economy and waste management.