Novo Holdings and PKA back emerging energy transition investor

Glentra Capital, an emerging manager with an energy transition strategy, has raised €443 million towards a target of €750 million for its debut fund.

The fund will invest “across the energy value chain and will target companies that are directly engaged with developing, building and servicing the infrastructure of tomorrow”, Christina Sobfeldt Jahn, the firm’s director of investor relations and ESG, told New Private Markets on Thursday.

The firm, which has offices in Copenhagen and London, will target the offshore and onshore wind and solar sectors, but will also look at “sustainable fuels (for example sustainable aviation fuels), energy storage, electric mobility and similar energy integration sectors”.

“With a commitment to promote ESG measures, the fund seeks to drive positive change while delivering attractive returns for its investors,” according to the press release announcing the first close.

Glentra founder and managing partner Henrik Tordrup commented: “Only by creating value and attractive risk-adjusted returns are we truly able to accelerate the transformation that is needed.”

In terms of financial returns, Sobfeldt Jahn declined to comment on specific targets. She said they would be “low-end private equity, high-end infrastructure and definitely double-digit”.

Novo Holdings, a life sciences group with a $26 billion investment portfolio, seeded the firm with a commitment of around DKr2 billion ($288 million; €268 million). Danish pension PKA has committed DKr1.1 billion.

Novo Holdings, which is the holding company for life sciences businesses Novo Nordisk and Novozymes, has acquired a stake in the general partner as well as becoming a limited partner in Fund I.

The purpose of Novo Holdings is “to improve people’s health and the sustainability of society and the planet” by generating attractive long-term returns on the assets of the Novo Nordisk Foundation.

Through its Capital Investments unit, Novo Holdings has seeded emerging managers before – it was an anchor investor in India’s Convergent Finance, for example – but does not have a specific emerging managers ‘programme’, said Morten Beck Jørgensen, managing partner. Instead the investor seeds managers “if we find the right talent”, Beck told New Private Markets.

“Henrik [Tordrup] came with a very strong investment track record; he was one of the main guys in the [Copenhagen Infrastructure Partners] investment machine room. There was also a strong personal and cultural alignment, and we are constantly looking for ways to deploy capital into the green transition,” said Beck.

Novo Holdings was attracted to the “more balanced risk profile” of Glentra’s strategy, which invests in operating assets and platforms for development, as well as services businesses that supply the energy transition.

There was another significant draw, said Beck: “We like the fact that they are starting with a clean piece of paper. It is a strength that they do not have a legacy portfolio to manage.”

In terms of dealflow, the “drying up” of capital markets this year means the firm sees “a lot of really good investments out there needing capital” with a “few” investments close to being executed, said Sobfeldt Jahn, “I would imagine a rather fast deployment of capital”.