Colesco, a private lending firm committed to sustainable investing, has secured over €800 million ($839 million) in the first close of its inaugural private credit fund. The fundraise marks a significant milestone for private credit managers exploring ESG investments.
APG Asset Management NV, one of the world’s largest pension asset managers with €577 billion under management, participated in the raise, joining Dutch bank Rabobank as a cornerstone investor.
According to a statement from Colesco, its investor base so far comprises mainly institutional backers from the Netherlands, the Nordics, the DACH region (Germany, Austria, and Switzerland), and the UK. The fund aims to reach €1 billion to €1.5 billion in total commitments, according to Colesco co-founder and Chief Investment Officer Danny Vroegop.
“Normally APG doesn’t engage with first-time funds, but in sustainability-focused private credit, all vehicles are more or less new funds, so we went for it after a long selection process,” said Menno van den Elsaker, APG’s Head of Alternative Credits. “It’s important for us to be a frontrunner in this space.”
Colesco’s fundraise comes at a time of growing interest in energy transition projects, particularly within the private credit and private equity sectors. However, the industry faces increasing regulatory scrutiny, with anti-greenwashing regulations prompting a record number of funds to remove ESG-related terms from their names.
Despite these challenges, Colesco is positioning itself as one of Europe’s largest sustainability-focused private lending platforms. The firm plans to allocate over 50% of its investments to sustainable projects, with the remainder targeting companies demonstrating a clear path to sustainability. Colesco employs sustainability ratchets, which offer pricing discounts if specific sustainability Key Performance Indicators (KPIs) are achieved.
“Many private credit lenders use ESG ratchets in credit documentation, but the real challenge is identifying KPIs that are ambitious, realistic, and tailored to the individual business,” Vroegop explained.
