Paris-based Natixis Environment & Infrastructures is rolling out its second carbon fund to exploit opportunities in the burgeoning market.

The new private equity vehicle, the European Kyoto Fund, will follow the same investment strategy as its predecessor offering, the European Carbon Fund, by investing in all types of carbon assets, including post-2012 emission reductions. Those reductions are in line with the long term emission reduction target announced by the European Union.

However, the fund is not limited to Kyoto assets or European assets and may include U.S. carbon assets, according to Karen Degouve, head of carbon finance at Natixis.

“As we go forward and U.S. legislation falls into place, we see a lot of interests from U.S. investors into this market,” Degouve told CleanTech Brief. “We have a huge pipeline of projects of more than 13 million tons with people we’ve already done deals with.”

Degouve said the fund, which is currently not available to U.S. investors, is getting a lot of attention from pension funds, which are wary of long lockup provisions. “We do invest in projects that take a long time to deliver a return on investments, so there is a lockup period of four years, and this is something that not all pension funds are at ease with.”

The firm originally planned to raise some €500 million ($US661 million) for its follow-on offering, but has had to scale the fund’s target down because of the tough fundraising market, said Degouve.

Natixis has so far raised €50 million (US$66 million) for its second carbon offering.

The firm’s European Carbon Fund raised €142.5 million (US$188.4 million) in 2005 from several investment-grade financial institutions.

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