The initial close of €50 mln includes funds from a range of investors including pension funds and family offices, as well as strategic real estate operators and investors.

The newly launched fund, which is the first in a new fund series, is led by partners Conan Lauterpacht and Matthew Chagan. It will target investments in high-growth technology companies that enable a more sustainable built environment and will focus on late Seed to Series B technology companies globally, with a strong focus on Europe. The fund has already been active, investing in two companies that are leaders in their respective markets: GBuilder and Liftango.

Headquartered in Finland, GBuilder is a Building Information Modeling (BIM) compatible customer journey management platform which maximises the value in residential sales, empowers builders and developers to deliver exceptional customer service and helps to minimise costs. The solution reduces material wastage and allows customers to understand the sustainability impact of the materials that they choose.

The second investment is in Liftango, a global company that provides market leading software to power convenient, efficient and sustainable shared transport, to ultimately reduce carbon emissions from the built environment.

Second close by year-end

Conan Lauterpacht, partner at SFV, told PropertyEU that despite the challenging macro environment, the fund is targeting second close by the end of the year with the final close planned for the first half of 2023.  

‘There is significant interest both from strategic investors (i.e. real estate market participants looking for insight into the proptech market) as well as from large institutions and LPs looking for financial returns,’ Lauterpacht said.  

‘From a financial standpoint, LPs tend to focus on sectors with a natural hedge to inflation or on high growth segments such as venture capital. We are operating at the intersection of those two worlds which is a very promising market. We are positioned to hit returns of 25%+ IRR or a 3X multiple on equity,’ added Matthew Chagan, partner at SFV.

SFV’s investment strategy is compelling, noted Lauterpacht. ‘In the public market tech stock has dropped significantly. We are in the fortunate position that we are coming to market now. In fact, we see significant opportunities f to take advantage of reduced investment valuations over a five-year plus timeline.’  

Bringing insight

While  Lauterpacht and Chagan admit there is major competition in the market, they also reckon in the most exciting VC deals an investor needs to justify its presence at the negotiations table. ‘We are not only investing in the company, we are also bringing our insight and experience to our portfolio companies. Our team brings a combination of investment and operations experience as well as backgrounds both in real estate and the broader technology sector. This team combined with Patrizia’s global platform is a unique proposition.’

Chagan added, ‘The movement towards carbon neutrality in our sector will demand a significant deployment of investment that we believe will fundamentally change the economics of the built environment and accelerate the adoption of technology solutions. It’s a very exciting time to be in this space and I hope we can make a significant contribution towards reaching sustainability targets through technology.’

Patrizia started putting together a VC investment platform around 18 months ago with the hire of Lauterpacht, who was the founder of M7 Structura, before the proptech firm was taken over by Patrizia in 2020. Sustainable Future Ventures (SFV) now consists of six professionals and is dedicated to generating financial returns for its investors by backing technology companies that positively impact environmental, social and productivity challenges in the built environment. The firm has offices in London and Hamburg and invests in companies globally, with a focus on Europe.  

‘Reducing our carbon footprint in construction and real estate is the biggest challenge of our time, so funding the companies who are at the cutting edge of sustainable innovation is absolutely essential,’ commented Wolfgang Egger, CEO and Founder of Patrizia.