Waste, water, energy efficiency find fund interest

LONDON Jan 28 (Reuters) - Companies in the waste management, water treatment and energy efficiency areas offer the most potential for venture capital fund investment, funds said at a clean technology conference on Thursday.

"Waste is very much an area we are looking at at the moment, particularly local-scale projects. There are good opportunities in the food waste management sector such as anaerobic digestion," said Tom Thorp, investment manager at Foresight Ventures, which has around 200 million pounds ($325.4 million) of assets under management.

Climate Change Capital Private Equity Fund partner Alex Betts saw potential in waste management in Britain but said there still were policy uncertainties which were unhelpful for investors and entrepreneurs in this field.

Other funds said the waste management sector would not have much of a future in 10 years' time and favoured projects which convert waste to energy.

"Those (companies) moving to the energy side do have a future," said Nigel Taunt, managing director of Impax Asset Management's venture capital division.

Impax, which has 1.5 billion pounds under management in the environmental space, is also interested in energy efficiency, power management and water treatment.

"We have also been looking for a decent investment in water for many years but we have not seen one yet. There ought to be some businesses coming through," Taunt said.

It is far harder to raise the amount of capital required to deploy physical assets such as wind turbines or marine technology because the costs mount over time, the funds said.

"There is a lot of interest in new wind turbines and marine but the money to get them going turns into a lot more and it is hard to raise that quota of money to take that risk," said Mark Thompson, director at Tiptree Investments.

"But if you look at metering, you are not betting a huge amount of money and you can refine the technology very quickly." (Reporting by Nina Chestney; editing by Christopher Johnson)