Clean Growth Fund has raised £81.5m for its second vehicle, pushing it past the halfway mark of its £150m target.
The second close was supported by a £22.5m commitment from Border to Coast’s UK Opportunities Fund. The partnership manages around £120bn across 18 Local Government Pension Scheme (LGPS) partner funds.
The fund backs Seed to Series A UK companies focused on technologies designed to reduce carbon emissions. It targets a 20% internal rate of return (IRR) and plans to invest in 25 companies. It has already deployed capital into four startups across Sheffield, Bristol, Cardiff and London.
Strathclyde Pension Fund also added £10m to its allocation, taking its total commitment in the second fund to £30m. Islington Pension Fund and East Riding Pension Fund have also invested in the vehicle.
The announcement follows the fund’s exit from clean heat network developer Rendesco in May 2026, which subsequently secured £100m in investment from Pioneer Point Partners. Law firm Pinsent Masons advised Clean Growth Fund on the deal.
Beverley Gower-Jones, founder and managing partner of Clean Growth Fund, said: “Border to Coast joining Fund II takes us past the halfway mark towards our £150m target. Increasingly, major institutional investors are looking to UK climate tech for exactly what it offers – strong long-term returns alongside real economic growth right across the country.
“We exist to connect British institutional capital with British innovation – the returns and the impact go hand-in-hand. Fund I invested in 19 UK startups on track to abate 27m tCO2e per year by 2030, equivalent to 1.5 times the carbon absorbed by all UK forests. Fund II aims to back 25 companies and scale them. It has already invested in four startups, across Sheffield, Bristol, Cardiff and London, developing groundbreaking innovations in battery tech, food, heavy industry and buildings – creating good quality regional jobs and driving clean industrial growth.”
She added: “The UK has the world-class universities, the scientific talent, the regulatory framework, and the policy ambition – and its net zero economy is growing more than three times faster than the economy as a whole. That is the opportunity Border to Coast is moving to capture, ahead of the curve. The more capital that gets behind British innovation, the faster it scales into global winners. This is where the growth is, and I’m confident about how much further we can take it.”
Keith Angood, portfolio manager of Border to Coast Pensions Partnership, said: “Border to Coast’s UK Opportunities Fund targets investment into high-quality UK companies and assets that can deliver attractive returns whilst contributing to economic growth and development across the UK.
“Clean Growth Fund II strongly matches these objectives, providing exposure to innovative UK businesses operating in a growing sector, managed by an experienced team with a proven track record. We believe it offers an attractive opportunity to deliver long-term value for our Partner Funds while supporting UK innovation.”
Lorraine Martin, investment manager at Strathclyde Pension Fund, added: “We first invested in Clean Growth Fund because it offered a compelling opportunity to deliver strong long-term returns for our members while backing UK innovation. That thesis has materialised, and our increased commitment to Fund II reflects our continued confidence in the team as well as the scale and strength of the opportunity. This is exactly the kind of productive, homegrown investment we believe can deliver for our members over the long term.”
