Switzerland-based Argos Wityu has launched an “Article 9” buyout fund dedicated to investing in European SMEs with a CO2 intensity reduction target of 7.5% per year and a direct focus on environmental performance.
The GP’s new climate action strategy also ties its portfolio companies’ equity incentive to the achievement of this objective, according to a press release. The decarbonisation of portfolio companies will be measured by pre-approved GHG emissions auditors and accounted for by the CO2 equivalent in tonnes per every million euros in sales.
In case the GHG emission intensity reduction target is not achieved, one-fourth of the team’s carried interest will be mobilised to compensate for every missing ton of CO2 equivalent reduction, on a ton-per-ton basis, by funding high-quality carbon compensation programmes, according to the press release.
The fund will invest in European SMEs for which decarbonisation is key to their long-term development. The “Article 9” classification relates to the most demanding level of environmental ambition under EU Sustainable Finance Disclosure Regulation (SFDR).
Argos’ climate action strategy is an extension of its existing platform and will sit alongside the GP’s flagship funds, which are primarily focused on supporting mid-sized businesses whilst integrating various ESG considerations, according to the press release.
The fund will be managed by a European investment team of six full-time Argos partners and supported by Argos’ Head of ESG, Jessica Peters, who was appointed to the role in May.
The GP strengthened its team earlier this month with the hires of two senior partners: Sandra Lagumina, formerly deputy CEO of Meridiam and CEO of GRDF; and Jack Azoulay, formerly chief of staff at the Ministry in charge of Energy, Transport, Housing and Environment in France and Industrial Shareholdings Director at the French Government Shareholding Agency.
With more than EUR 1.4bn under management, Argos Wityu is also deploying equity via Argos Wityu Mid-Market VIII, which invests in small and mid-market buyouts involving European companies, according to Unquote Data. LPs in the fund include the European Investment Fund (EIF), among others.
Argos Wityu Article 9 fund − Louis Godron (managing partner), Lucio Ranaudo (senior partner, Italy), Simon Guichard (partner, France), Fabian Söffge (partner, Germany), Sandra Lagumina (senior partner), Jack Azoulay (senior partner).