In brief: Capza plans ESG-linked carry for €1.3bn-target decarbonisation fund

The Paris-based firm has launched an Article 8 leveraged buyout fund targeting €1.3bn ‘to support SMEs on decarbonisation’.

Paris-based Capza plans to link its carry to achieving ESG KPIs for its latest fund, a source familiar with the firm told New Private Markets. Capza declined to comment on the ESG-linked carry mechanism. The firm previously trialled ESG-linked carry for its sixth private debt fund, launched last year.

Capza is targeting €1.3 billion for Flex Equity Mid-Market II, which will invest in European SMEs “in transition to carbon neutrality and companies that develop products and services that contribute positively to sustainable development issues, particularly environmental ones,” according to a statement from the firm. The fund will work with portfolio companies’ management to develop a “sustainability and decarbonisation road map… and will provide the company with financial and human resources to support its implementation.” It will make 10 to 15 investments in Europeans SMEs via ordinary shares, preference shares or convertible bonds.