EIB-backed bioeconomy fund targets €160m second close

ECBF Management general partner Michael Brandkamp says the fund has an IRR “above 20 percent” and hopes to sign five new investors to double the vehicle’s €82m first close size.

The European Circular Bioeconomy Fund, which received a €65 million anchor investment from the European Investment Bank, is targeting a mid-November €160m second close, fund advisor ECBF Management told Agri Investor.

ECBF Management general partner Michael Brandkamp said it was “difficult to answer” Agri Investor’s question regarding a target size for the fund’s second close, but said the firm is “optimistic that up to five new investors, [in effect] doubling the fund size, will join.”

The ECB Fund had an €82 million first close at the start of October, taking in €17 million from private backers PreZero International, a waste and recycling company, bio-based chemicals and polymers firm Corbion NV, and Hettich Beteiligungen, an investor in sustainable businesses and services. It has a €250 million target.

The vehicle is billed as the first equity fund dedicated to exclusively investing in the bioeconomy (the parts of the economy that use biological resources) and the circular bioeconomy. It has so far invested in PeelPioneers, a Dutch firm that is developing technology to turn orange peel waste into essential oils, flavourings and dietary fibre, as well as Prolupin, a producer of high-quality proteins that are turned into dairy alternatives.

ECBF Management was established with the sole purpose of advising the ECB Fund’s investment decisions “and looking after the portfolio companies,” said Brandkamp, with Hauck & Aufhäuser Fund Services’ Luxembourg office acting as the fund manager.

The vehicle has an IRR target “above 20 percent” said Brandkamp, and has received a commitment from an institutional investor since its first close. Brandkamp declined to disclose the size of the commitment or the identity of the investor.

The fund’s target allocation of portfolio companies is weighted towards agtech and foodtech, which represent 30 percent and 25 percent of the vehicle’s desired makeup.

“According to our investment strategy we allocate €10m on each company or project. Since we need to be prepared to participate in follow on financing, we usually start with around €5m on average,” explained Brandkamp.