Speaking at the launch of the Waste and Resources Action Programme's 5.5 million Recycling Fund in London yesterday, Ian Simms, managing director of the fund's management company Impax Asset Management, said that enterprises will consistently fail to gain investment for projects based on perceived opportunities from regulations not yet in place.
 Digby Jones of the CBI (right) called for market imperfections to be tackled (photo: Howard Sayer) |
He said: “Investors want to minimise technology risk. If it has been proved in Europe fine, but if it has been proved over here even better. We are venture capitalists after all.”
The first equity fund in Europe dedicated to the recycling sector, WRAP's fund is designed to help recycling firms overcome the unproven nature of the recycling market and gain investment. It also aims to attract other investors to put monry into the sector.
In addition to 4 million provided by WRAP, 1.5 million of the fund has come from private sector investors Wastepack, Barclays and Partnership UK. The fund opened to applications in July 2003 (see letsrecycle.com story).
Lending his support to the fund, director general of the CBI Digby Jones said that to attract investment, recycling companies need to tackle the issues associated with the industry.
He said: “We are keen to build on the progress already made but to do this a number of challenges need to be met. Tackling issues such as market imperfections, poor regulation and insufficient treatment capacity is crucial. The fund launched today is a positive contribution to the package of measures we need in moving towards sustainable waste management.”
Growth
There should be plenty of investment opportunities in the recycling sector, according to WRAP chief executive Jennie Price, since the sector's annual turnover in the UK of 12 billion is forecast to expand to as much as 30 billion in the next 15 years.
Ms Price said: “The real engine for growth in this sector is small companies who don't have the necessary backing but have the innovation. What they need is equity.”
The 5.5 million equity fund will last three years but WRAP intends to give ongoing business support to the companies who apply successfully to the fund.
There has already been a great deal of interest in the fund from recycling companies in the three months since it opened to applications, according to the Impax managing director. Mr Simms said: “Three investment opportunities have already been put to the fund's investors committee for approval.”
He added: “We hope we will be able to create entrepreneurs, we hope to create success stories and most importantly we hope to be able to go back to the investment community and say the recycling industry is worth investing in.”
Register for free to comment