Cash-rich public investors invest directly in fast-growing private companies

Two of Australia’s largest investment funds are backing a Silicon Valley start-up with more than $1 billion to lower the costs of renewable energy projects. San Francisco-based Generate Capital raised the money from the A$170 billion (US$114 billion) AustralianSuper pension fund, the government-owned Queensland Investment Corporation and other investors. The funding round is the latest example of how cash-rich public investors have sought to invest directly in fast-growing private companies. Generate is unusual for avoiding traditional venture capital and instead tapping sovereign wealth funds such as the $67 billion Alaska Permanent Fund to back its renewable infrastructure project financings, which include loans made to developers… Generate has partnered with more than 20 groups including BYD Motors, a battery and vehicle company backed by Warren Buffett, and Plug Power, a publicly traded company whose hydrogen fuel cell technology is used by Amazon and Walmart… Generate funds and partners with infrastructure projects focused on sustainable technologies, which are sold to public and private sector customers… These investments… have gone toward projects ranging from community solar installations to biogas power systems. 

Miles Kruppa