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Lightsmith Group Closes Inaugural $186 Million Growth Equity Climate Fund, the First to Focus on Climate Resilience and Adaptation

01/31/2022 | 12:31pm EDT

Lightsmith Group (“Lightsmith”), a global sustainable private equity firm, is pleased to announce the final closing of Lightsmith Climate Resilience Partners SCSp RAIF (“Lightsmith Climate Resilience” or the “Fund”) with $186 million of commitments. Lightsmith Climate Resilience is the first private equity fund to have focused on climate resilience and adaptation, investing in growth-stage technology companies that address the effects of climate change. In the Fund, Lightsmith has brought together leading investors from around the world, including PNC Insurance Group, The Rockefeller Foundation, Kinneret Group, and Caprock Impact Partners, as well as the Green Climate Fund (“GCF”), European Investment Bank, Asian Infrastructure Investment Bank, KfW on behalf of the German Ministry for Economic Cooperation and Development (BMZ), Nordic Development Fund, the Government of Luxembourg and other investors.

Lightsmith’s two founding partners, Jay Koh and Sanjay Wagle, each have over 20 years of experience in direct investing at The Carlyle Group and VantagePoint Capital Partners as well as at US Development Finance Corporation (DFC), International Finance Corporation (IFC), US Department of Energy, and New York Green Bank. Lightsmith’s global investment team draws from experience at Goldman Sachs, True North Partners, Baring Private Equity Asia, IFC, and US DFC. Richard Kauffman, the Former Chairman of Energy and Finance for New York State, serves as Chairman of the investment committee for Lightsmith Climate Resilience.

Lightsmith Climate Resilience invests in growth-stage companies whose technologies can address the growing physical impacts of climate change, which represents an estimated total addressable market of over $170 billion today. Climate Policy Initiative (CPI) has concluded that Lightsmith Climate Resilience is the first private equity fund focused on climate resilience, and reported that until now, less than $500 million per year of private investment has targeted climate change adaptation.

Lightsmith Climate Resilience is focusing on six initial technology areas: water efficiency and smart water management, resilient food systems, agricultural analytics, geospatial intelligence, supply chain analytics, and catastrophe risk modeling and risk transfer. Lightsmith Climate Resilience helps companies scale up by applying their technologies to help businesses and communities adapt to climate change, by expanding internationally, particularly in emerging markets, and by partnering with Lightsmith’s global network of companies and governments. To date, Lightsmith Climate Resilience has made investments in SOURCE Global, a water harvesting technology company with an off-grid solution to produce affordable drinking water from sunlight and air, and WayCool Foods, an India-based agriculture and food supply chain services company applying physical automation and digital technology to reduce food wastage and improve farm output.

Lightsmith Climate Resilience is committed to delivering economic returns while adhering to global environmental, social, and governance (ESG) standards and providing impact assessment through its Impact Measurement System (IMS).

“Lightsmith Climate Resilience is the first private equity fund to focus on investing in solutions to the effects of climate change,” said Kauffman. “Lightsmith has brought together a team with a unique combination of experience in direct investment and climate change and has secured the commitment of leading global investors to invest in climate resilience.”

“Climate resilience technologies are an overlooked, multi-billion dollar investment opportunity that will just keep growing,” said Koh. “Increasing drought, agriculture stress, and supply chain disruption linked to climate change will drive demand for data and analytics to understand those risks and for the solutions to manage them.”

“As investors, we know very little about the future with any certainty. One thing we do know is that companies that have smart solutions to respond to climate change will be increasingly in demand. Investing in climate resilience solutions can deliver both financial returns and real benefits to companies, communities, and individuals,” said Wagle. “Climate resilience technology is an opportunity for investors and for us all.”

Lightsmith Climate Resilience is based on an investment strategy (referred to as “CRAFT”, the Climate Resilience and Adaptation Finance and Technology-transfer facility) developed with the support of the Global Innovation Lab for Climate Finance, Nordic Development Fund, the Global Environment Facility, Conservation International, and the International Climate Finance Accelerator (Luxembourg).

The GCF, established by 194 countries under the UN Framework Convention on Climate Change in 2010, has committed $46 million to become the largest investor in Lightsmith Climate Resilience. Pegasus Capital Advisors, a leading global private markets impact investment manager, serves as the accredited entity to GCF for its commitment. “GCF is extremely proud to make this investment in CRAFT. By committing to the first private sector investment fund for adaptation, GCF’s catalytic investment will accelerate the transfer of private sector technologies to developing countries, boosting climate adaptation efforts and resilience, while promoting a green recovery from the COVID-19 pandemic,” said Yannick Glemarec, Executive Director of the Green Climate Fund. “It is a game changer and a strong example of the role the private sector can play in mobilizing adaptation finance and delivering innovative solutions to complex climate challenges.”

ABOUT THE LIGHTSMITH GROUP

The Lightsmith Group is a sustainable private equity firm that invests in companies that address critical societal needs. Lightsmith invests in growth-stage companies providing technology-enabled business services and solutions in the areas of energy, water, food and agriculture, and climate resilience. For more information on The Lightsmith Group, please see: www.lightsmithgp.com.


© Business Wire 2022
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