Clean Growth Fund has announced a second close of Fund II at £81.5 million, taking total investor commitments more than halfway towards a £150 million target. The specialist UK climate tech venture capital platform backs Seed to Series A companies pioneering technologies with the potential to cut carbon emissions and grow Britain's green economy, targeting a net return on capital of 20% IRR.
Anchoring the second close is a £22.5 million commitment from the UK Opportunities Fund of Border to Coast Pensions Partnership, the UK's largest local government pension pool. Launched in 2024, the UK Opportunities Fund seeks long-term risk adjusted returns for its LGPS Partner Funds and backs investments that help drive UK economic growth. The pool partnership has combined assets of around £120 billion, representing 18 Local Government Pension Scheme partner funds.
Strathclyde Pension Fund, a backer since Fund I, has added a further £10 million, increasing its Fund II commitment to £30 million. Alongside Islington Pension Fund and East Riding Pension Fund, the pension investors form a widening coalition of British pension capital behind homegrown innovation.
Fund II will back 25 UK startups developing low carbon technologies. Four investments have been made to date, across Sheffield, Bristol, Cardiff and London, covering battery technology, food, heavy industry and buildings. The place-based investment strategy directs capital to the established science and investment centres of Oxford, Cambridge and London as well as emerging hubs in the regions across the UK. An eighth pitching and networking roadshow takes place in Cardiff on 7 October.
According to Clean Growth Fund, the UK's net zero economy is growing more than three times faster than the economy as a whole.
Fund I invested in 19 UK startups on track to abate 27 million tCO2e per year by 2030, equivalent to 1.5 times the carbon absorbed by all UK forests. The second close follows an exit from Rendesco in May 2026, when the clean heat network developer secured £100 million in new investment from Pioneer Point Partners. Pinsent Masons LLP advised Clean Growth Fund again on the close, with a team led by Ian Warner.
Border to Coast joining Fund II takes us past the halfway mark towards our £150 million 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. 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.
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.
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.
