Craton Closes Debut Fund

Craton Equity Partners, a Los Angeles-based firm focused on VC and PE opportunities in the cleantech sector, has closed its debut fund with $191.5 million in capital commitments. It had held an $82 million first close last December, and had been targeting $250 million.

 

PRESS RELEASE 

Craton Equity Partners, a Los Angeles-based emerging manager's Clean Tech fund, announced that it has finalized its third and final closing of their debut fund, having raised a total of $191.5 million from institutional investors and funds.

 

Their institutional investors are some of the nation's largest, and unprecedented as participants for a debut clean tech fund of this size. Craton had its first closing in December 2006, and since then has invested into two portfolio companies while raising the balance of the fund.

 

The announcement was made by Craton founders Bob MacDonald and Tom Soto, longtime environmental financiers and activists.

 

“Craton's philosophy is to invest in those technologies that are known alternatives to carbon intensive technologies currently in use,” said MacDonald. “Craton focuses on investing in small emerging growth companies whose products and services provide green building materials, renewable energy generation, alternative fuels, water remediation and management, and solid waste reduction and conversion technologies.”

 

“Having worked for so many years in the environmental movement and in the renewable energy field, we saw the opportunity to combine our activism, our experience dealing with

environmental regulation, and the new focus on green technology to spur whole new markets,” said Soto. “The private sector is the new frontier of the environmental movement. If we are going to solve the crisis of climate change it is going to require a partnership of activism, government, technology and capital.”

 

Clean tech businesses are now the sixth largest investment category in the United States (behind information technology, software, biotech, health care and telecommunications).

Soto and MacDonald combine environmental and regulatory expertise with a strong track record in private equity investments. MacDonald was one of the founders of Catalyst Energy, then one of the nation's leading, publicly traded independent producers of renewable energy. He has since managed a private equity fund, investing in small emerging growth companies in the basic industry and manufacturing sector with tremendous success. A majority of these investments not only produced excellent returns but also created jobs across California.

 

Soto is a longtime environmental activist and Latino business leader. He was president of the Coalition for Clean Air, served on the board of the California League of Conservation Voters, and currently is board secretary for the Mono Lake Committee. His work on the federal Clean Air Act and other environmental regulations has given him a unique perspective on using environmental compliance and climate change regulations to improve financial returns. Soto previously founded an environmental regulatory and compliance practice, which became one of the nation's leading advisory firms in such matters. In addition, Soto went on to establish a Los Angeles based ethanol provider and provided counsel to other venture and private equity firms seeking to invest in the 1990's clean tech market.

 

At Craton, Managing Partners Soto and MacDonald are joined by two other General Partners, John Gerson and Michael Lenard. Gerson, Craton's Chief Financial Officer, had served in that capacity for William E. Simon and Sons Private Equity Partners and Kohlberg Kravis Roberts & Co. Lenard is a former partner at the Latham & Watkins law firm and also a former partner at the William E. Simon and Sons Private Equity Partners. The other members of the Board of

Directors, equally accomplished in financial and environmental matters, are John Kuhns, Danny Villanueva, Tom Valenzuela and Ed Begley, Jr.

 

Craton recently invested in Enlink GeoEnergy Services (enlinkgeoenergy.com) a company specializing in the installation of geothermal energy systems that can substantially reduce heating and cooling costs of medium-sized and large commercial buildings as well as substantially reduce carbon emissions. In 2007, Craton has also invested in GigaCrete (gigacrete.com), a next generation “green” building materials company that is moving from research and development into the commercialization of its carbon neutral, mineral cement based products. For further information, please visit the Craton website: www.cratonep.com