Image credits: Polestar Capital
Polestar Capital, a Hilversum-based impact investment firm, announced on Tuesday that it has launched the biggest circular economy fund in Europe.
Christened Polestar Capital Circular Debt Fund (PCDF), the investment firm has opened with €100M and expects to grow to €400M within a year. The Pension Fund for the Retail sector is the first investor in the fund.
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The fund will offer loans to innovative Dutch circular economy projects.
Why Polestar Capital Circular Debt Fund (PCDF)?
With the PCDF, the Dutch investment firm aims to invest in around thirty circular projects, which creates a systemic ecological impact in the areas like carbon emission and waste reduction and the replacement of fossil fuels.
According to Polestar, banks usually find such projects too innovative and VCs find it too capital intensive to finance in full.
Here’s where Polestar bridges the gap and allows circular production companies to prove their technologies and business models on a commercial scale.
The company’s initiative allows the Netherlands to play a pivotal role in the global transition towards a circular economy and contributes to the Dutch government’s ambition to be fully circular by 2050.
Henk Groot, CIO of the Pension Fund, says, “Polestar Capital has proven that they have a unique understanding of what is needed to finance the first commercial application of a circular business model, which is something that banks are still unwilling to do at an early stage. This will also help us make our pensions more future-proof and sustainable for 1.3M participants.”
The Pension Fund and Polestar Capital anticipate an additional €300M raise during the coming year, considering the interest from investors.
Polestar Capital: What you need to know
Based out of Hilversum, the Netherlands, Polestar Capital is an impact investment firm with a combined entrusted capital of nearly €1B.
The firm manages multiple funds, including the Limburg Energy Fund and the Dutch Heat Fund. All of these funds have impact targets but also deliver financial returns.
Jan-Willem König, partner at Polestar Capital, says, “The circular companies that the PCDF finances are capital intensive, meaning they require relatively large sums of patient capital. This makes them well suited to investors with long-term investment horizons, like Pensioenfonds Detailhandel. And – it goes without saying – I am personally proud that, by establishing this fund, we have put the Netherlands internationally on the map as the first country to open a circular economic fund of this kind.”
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