Pension pools push Clean Growth Fund II past halfway

Border to Coast's UK Opportunities Fund anchored the latest close of Clean Growth Fund's second climate-technology vehicle with a $30.3 million commitment, carrying the fund past the halfway mark of its target and deepening the role of Local Government Pension Scheme money in British climate venture.

Total commitments in Clean Growth Fund II now stand at approximately $110 million against a roughly $202 million (£150 million) target, the manager said. Strathclyde Pension Fund added about $13.5 million in the close to bring its full Fund II allocation to roughly $40.7 million, with Islington Pension Fund and East Riding Pension Fund also in. The pool partnership behind those investors represents 18 LGPS funds holding around $161 billion in combined assets, and the two named public-pension commitments alone work out to close to two-thirds of the vehicle.

How that capital is priced sets the terms: Clean Growth Fund targets a net internal rate of return of 20% and writes Seed-to-Series A checks into UK companies whose technologies can cut emissions across power, transport, industry, buildings, agrifood and the circular economy. Founder and managing partner Beverley Gower-Jones describes the fund as the connection between British institutional capital and British innovation; returns and impact, in her words, go hand in hand. Public money on one side and venture-return math on the other is the same structure this publication flagged when the second close first took shape.

Founded in 2020, the manager invests on a place-based thesis that reaches beyond established research centres such as Oxford, Cambridge and London into emerging regional hubs. Its four Fund II investments completed so far sit in Sheffield, Bristol, Cardiff and London, on the way to a planned 25 companies. Fund I backed 19 UK startups and is projected to abate 27 million metric tons of carbon dioxide equivalent annually by 2030, by the manager's estimate 1.5 times the absorption of all UK forests. An exit from renewable-heating business Rendesco came in May 2026.

Roughly $110 million of a $202 million target is in, and four of 25 planned positions are filled; the remaining 21 will have to prove that a 20% net return and a meaningful abatement ledger can clear the same bar. Pension pools can anchor a structure like this because their liabilities are long and their return expectations are disciplined, which is exactly why they will hold the manager to the target. The deals in Sheffield, Bristol, Cardiff and London are early evidence that the place-based strategy works at the edges of the golden triangle. The next 21 will show whether it also works at Seed-stage prices.