NZ Super Fund invests US$75 million in US-based 'intelligent' glass maker View
By Fiona Rotherham
Aug. 14 (BusinessDesk) - The New Zealand Superannuation Fund has invested US$75 million in US-based View, a maker of intelligent glass systems for commercial buildings, taking its total spend up on clean tech to date to $500 million.
The super fund has also committed US$350 million to a new collaborative investment platform targeting clean energy investments over the next five years, one of a number of climate change investment initiatives with an estimated value of more than US$4 billion announced by the US government in June. Including NZ Super’s investment, View has raised over US$500 million since it was founded in 2007 under the name Soladigm.
NZ Super chief investment officer Matt Whineray said View’s growth potential and the exposure it gives the fund in the energy efficiency sector made it an attractive addition to the $29.6 billion super fund’s portfolio.
“While these investments in early-stage companies with strong growth potential make up only a small part of the overall fund – around 1.5 percent - they are an appropriate part of the mix for a long-term, diversified investor seeking to maximise returns,” he said.
View makes dynamic-tinting glass which helps building occupants control light and glare and preserve their views by avoiding blinds.
The company’s chief executive Rao Mulpuri describes dynamic glass as “on-demand sunglasses for buildings” and it’s part of a growing market for smart glass that could be worth US$899 million worldwide by 2022 according to research firm Navigant Research.
Electrochromic glass uses a thin film of metal oxide, which activates to tint windows when hit with a small trickle of electricity. View’s dynamic glass has been installed at more than 120 sites across North America despite selling at a premium to ordinary glass, but the cost of the technology is falling and View claims its windows cut yearly heating, ventilating, and air conditioning costs and lighting energy consumption by 20 percent.
Previous NZ Super ‘expansion capital’ investments include fuel cell manufacturer Bloom Energy, wind turbine developer Ogin Inc. and carbon recycling company LanzaTech. The fund has spent $500 million to date in clean tech including $60 million in New Zealand through various investment managers.
View’s existing investors include clean tech backer Khosla Ventures and leading US glass maker Corning, with which it also has a joint development agreement.
View settled a patent dispute with its major rival Sage Electronics earlier this year.
Nigel Gormly, NZ Super’s head of international direct investment, will take a seat on View’s board.
Gormly said the fund’s offshore clean tech investments have all resulted from its involvement in an innovation alliance with Khosla Ventures, Silicon Valley venture capitalist Kleiner Perkins, and two other sovereign wealth funds.
Many failed clean companies came unstuck when they and their venture capital backers ran out of money in the so-called commercialisation “valley of death”.
Under the alliance model, the sovereign wealth funds can buy into innovative companies the venture capitalist has backed once the technology is already proven but still requires a lot of capital over a long-term horizon, Gormly said.
“What we’re trying to do is leverage our strength as an investor to be able to get involved in these companies at a time and place that allows us to get attractive returns,” he said.
He views the innovation alliance as a precursor to the clean tech investment initiative the super fund has committed US$350 million to, although it retains full investment discretion over the money.
The initiative involves building a non-profit “aligned intermediary” funded by philanthropists that identifies, screens, assesses, and invests in high-potential companies and projects that can produce profitable solutions to climate change. The long-term investors come in at a latter stage.
The consortium of long-term investors is initially allocating US$1.2 billion, with a goal of raising that to US$2.5 billion over five years that would otherwise not be invested in this area.
Gormly said long-term investors with big pockets like the super fund were a “valuable piece in the puzzle” through the new model’s funding cycle.