Amsterdam-based Polestar Capital has today announced the launch of Europe’s biggest circular economy fund – the Polestar Capital Circular Debt Fund (PCDF). The fund has opened at €100 million and expects to grow to €400 million within a year. The Pension fund for the Retail sector is the first investor in the fund.
Founded in 2012, Polestar Capital is an impact investment firm that now has a combined entrusted capital of nearly €1 billion – all earmarked for investments in sustainable initiatives aimed at creating meaningful impact. The firm specialises in structuring the kinds of financial solutions required to realise projects in the areas of the circular economy and renewable energy transition.
With the PCDF, Polestar Capital aims to invest in around thirty circular projects with the potential to create systemic ecological impact in the areas of carbon emission and waste reduction and the replacement of fossil fuels, but which are currently stunted due to a lack of funding. These projects are generally found to be too ambitious banks and too capital intensive for VCs to fund, and so the PCDF is offering a genuinely meaningful opportunity for the projects that are aiming to influence our future
By closing the funding gap, PCDF allows circular production companies to prove their technologies and business models on a commercial scale. In this way, the fund paves the road to future large-scale applications, altering linear value chains into circular value chains for good. Polestar Capital’s initiative also 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, said: “Polestar Capital has proven that they have a unique understanding of what is needed in order 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. By working together with Polestar Capital for the establishment of this fund, we hope to accelerate the transition towards a circular economy. This will also help us make our pensions more future-proof and sustainable 1.3 million participants .”
In addition, it doesn’t stop here at €100 million. The pension fund and Polestar Capital anticipate that an additional €300 million will be raised during the coming year, given the ample interest from investors.
Jan-Willem König, Partner at Polestar Capital, explained: “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.”