Russell Read, the exec who leads investment strategy for the California Public Employees’ Retirement System’s $244 billion pension fund — the largest in the country — said today that he plans to launch his own private equity fund devoted to clean energy after he steps down on June 30, adding more dollars to the river of green flowing into cleantech companies.
As the chief investment officer at CalPERS over the past two years, Read has pushed the fund to make more investments in infrastructure, such as power-generation plants, roads and bridges. And he has considerable experience in the private investment sector as well: Prior to joining CalPERS, for example, he was Deputy Chief Investment Officer for Deutsche Asset Management and Scudder Investments. However, it’s unclear if his experience managing a portfolio will translate into an ability to evaluate individual investment opportunities.
Read’s cleantech efforts will range from investments in early-stage startups to the types of large-project finance deals that hedge funds and other large money management firms are doing. And he will join several other green-focused funds such as Kleiner Perkins, which is raising a $400 million green growth fund for late-stage investments.
Given that overall venture investment in cleantech is slowing, I wonder how other fund managers and potential investors in such a fund will react to Read’s solicitations. Since most firms investing in cleantech haven’t generated exits yet, the returns for the sector aren’t easily measured. The opportunity in the sector is real, but there is certainly a lot of hype to work around as well.