Sir Richard Branson founded the Virgin Green Fund (VGF) last year as a way to fulfill his 2006 pledge to invest $3 billion in renewable energy. VGF has just completed a round of fundraising, bringing together $199 million from a variety of investors.

Some of the investors joining VGF include Wolverhampton City Council and Calpers (a pension fund). Calpers’ investment in VGF are part of a growing trend for pension funds to place more of their assets into alternative investments, banking on the fast-growing cleantech sector to make their upcoming payments.

Because of VGF’s backing by both Virgin and Branson, the fund was able to being buying stakes in companies even before completing its first round of raising capital. The fund has seven investments so far, and finalizing a deal to buy DuraTherm, a Texas recycling business with the help of Masdar Clean Tech Fund. The deal has a price tag of over $40 million and would be a leveraged buy-out — unusual for cleantech investing.

DuraTherm typifies the approach VGF is taking to investing: the fund wants to get in on late-stage projects, rather than offering venture capital. Shai Weiss joined Virgin to lead VGF after a stint with ntl:Telewest.

Photo — Chris Ford UK