Clean technology is the new opportunity area for investors, according to Singapore-based private equity fund Novo Tellus, which has singled out the sector as one of its focus activities. And this is not just because of idealism.
‘We’re in the cleantech space not just because it is responsible investing,’ says Novo Tellus founder and managing director Wai San Loke.
‘Energy efficiency has a definite business case. Insulation, efficient lighting, more efficient air conditioning and so on – all these provide cost savings for companies in terms of cutting down electricity use. We’re already seeing commercial users making commercial decisions in these areas.’
Novo Tellus, which was registered last August and recently closed its first round of funding at $20 mn, has to date invested in two companies: medical disposables manufacturer Amsino and energy-efficient lighting company JK Yaming, both incorporated outside China but with significant China operations.
The fund intends to build both companies into international platforms over a two-to-three-year time frame, with the ultimate aim of exiting via strategic sales or IPOs.
‘I believe certain solutions today are hitting a three-year payback for areas such as lighting, chilling and heating [in temperate countries],’ says Loke.
‘Others, like smart building controls, are longer term. But the important thing is that these areas have regulation and business growth behind them. And this is part of our thesis at Novo Tellus: we expect a lot of proven technologies to be up for acquisition within the next three years. Those who have platforms to take advantage of these technologies will be winners.’