Environmental friendly technology firms have found the recent stock market volatility difficult on their finances, especially for raising funds. Though these “green” companies have had trouble getting loans from banks, pension fund groups have been setting aside private equity.

Vivek Tandon, co-founder of Aloe Private Equity in London, manages 11 firms in environmentally friendly areas such as energy efficiency, renewable energy, and recycling. The company has 175 million euros, or $253 million in assets. If you are part of a company with limited funding, and would like to supplement your pension, consider a personal pension.

“There is quite a large number of institutions out there who do now want some exposure to (…) the clean tech market,” the co-founder said.

Despite Stock Market Woes, Private Equity Means Pensioners Win

Throughout 2010-2011, stocks in the clean energy sector, with which Aloe Private Equity is involved, have fared worse than global stocks. Investors have had to leave projects and companies have suffered financially. This makes the market for “green” companies not at the level it was before the recession hit. The same can be said about many companies, but many people have had to put themselves first rather than consider the environment.

However, private equity has been set aside from pension fund groups. This type of investment can be quite risky but can also have great returns for the pensioners who take those risks—and environmentally friendly plans tend to have a “do-gooder” attitude surrounding them, making them more attractive to customers. Additionally, “green” companies are routinely endorsed by celebrities such as Ian Sommerhalder’s animal rights/environmentalist company ISF, making them a huge attraction.

If you would like to tie your pension to the stock market as well, have a look at a stakeholder pension. This type is both easy and inexpensive and could be well worth a risk, as an investment is made for the long term.

Investing in India Could Be the Reason

Companies are continuing to push boundaries despite poor financial news. Aloe Private Equity owns a 13.7% share in Indian-based company, Greenko, which has experienced a high rise in shares since it began to advertise in London. Proceeds for the month of June were £50 million, helping the company’s Aloe Environment Fund.

Tandon described the choice of using India, saying, “In India, renewable energy is a no-brainer. You can get good returns if you can control the operational aspects of the company and control the installation and deployment of the renewable energy projects.”

The country tends to have more red tape, but the rewards are better, as with the stakeholder pension. If you are interested by this news and would like to know more, why not start with our pension calculator?

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