Science to Impact according to Liduina Hammer | Polestar Capital


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Liduina Hammer started her role as fund engineer at 100% impact asset manager Polestar Capital in September this year. Before then, she was head of investment at InnovationQuarter, the regional development agency for south-west Netherlands. We asked her what catches her eye about the Science to Impact landscape seen from those different places.

What is Polestar Capital's focus area?

Polestar Capital is a 100% impact investor, mostly providing debt products to projects, entrepreneurs and individuals contributing to an inclusive, sustainable and circular economy. Our belief is that to make the right impact, you have to invest in the enterprises of the future. It is our mission to accelerate the climate transition and step into the funding gap where other financiers cannot or insufficiently do so.

Where do you get the money from?

We now manage three funds; i.e. the Polestar Circular Debt Fund, het Limburgs Energiefonds (LEF) and Warmtefonds Nederland. In these funds, both private and public parties invest, like pension funds, banks and government-related funds. In addition, we will soon start fundraising  for an e-mobility fund. In total, we now have an investment volume of over EUR 1.2 billion.

Your investments include innovation enterprises. Do those include early-stage deep tech companies?

Currently, we do not have a fund through which we invest in early-stage deep tech companies. Polestar Capital now invests mostly via debt products which are less suitable for very early phase companies. To compensate for the high risk profile of these companies equity investments are required. That is where venture capital fits better. The potentially higher returns generated by exits also allow such investors to take more risk.

Do you see this changing in the near future?

Not immediately yet. Although there are many positive developments, there is still a shortage of real private patient capital in the Netherlands for early-stage hardware or deep tech companies. The development time and time to exit take relatively more time.  which requires

How unique is your company?

Quite unique. We are one of the few private debt funds with sufficient capital to invest in impact companies in the Netherlands.

Consider for example the Polestar Capital Circular Debt fund. This fund can invest when the technology is still too risky for banks and too capital-intensive for venture capital. The investment is provided to innovative circular enterprises that, for example, are about to build their first commercial plant.

Is that capital infinite?

No certainly not. Ultimately, it is about making impact and delivering an attractive return for our investors, so we are no Santa Claus. Making real impact is the common thread running through the organisation. We are an SFDR (ed: Sustainable Finance Disclosure Regulation) Article 9 fund, the most sustainable fund according to the EU distribution of funds. Measuring impact is part of  our entire investment process.

What are your drivers?

All of us at Polestar Capital share the vision that innovations are needed to achieve climate goals. Now is the momentum to act. Finally, the right debate is taking place in the Netherlands. People are starting to realise that further delaying the climate goals is no longer responsible for the generations to come. However, there is insufficient capital available to support those entrepreneurs who are going to make a difference. We are filling that gap.

You've been there since September. Can you tell anything about your role yet?

At the moment, I am working on Polestar Capital's strategy development. This is because we want to play an important role in the climate transition in the Netherlands. I look at where we can add value in the financing landscape; what initiatives are already there, what do entrepreneurs need and where are the gaps. 

Glad with your move? You previously worked at public investor InnovationQuarter

Yes definitely! What really attracts me is the company's almost un-Dutch ambition to want to make impact on a large scale. Tens of billions are needed to meet climate targets in the Netherlands alone. When the CEO, Jan-Willem König then tells me that his ambition is to significantly contribute to this with Polestar Capital, it makes my heart tick.

You have been working in different places in the investor landscape. What do you notice?

Fortunately, there are many positive developments but I do worry in a number of areas. I still see a (large) shortage of patient private capital in sectors where the development time and thus the payback time is longer. I would like to see more funds that can step in early and have enough capital and time to seriously grow with successful companies so that entrepreneurs have more time to do business instead of spending much of their time fundraising.

In addition, we have good knowledge institutions in the Netherlands and a lot is also being done to encourage spin-off activities, but I see few seriously large companies emerging from these. To build a real company, you need people with market experience in addition to innovative technology and capital. That is where it would help to bring in people who already know how business works at an earlier stage. Investors sometimes pay too long for the learning curve of the inexperienced entrepreneur and that is a waste.

In addition, Dutch entrepreneurs are quite stubborn, which is good on the one hand, but it can also backfire on them. They seek too little help, wanting to do too much themselves. But even though the technology is different, you all experience the same things. My appeal to entrepreneurs is to search for each other, to question each other about how you handle things.

Fortunately, more and more good examples are emerging. One such example is Nearfield Instruments, a promising spin-off from TNO. This company has developed an innovative and extremely accurate technology to measure faults in microchips during manufacturing and they have also attracted the necessary investments.  

Also read: the story of Hamed Sadeghian, CEO/CTO of Nearfield Instruments

What do you think is needed for a better Science to Impact climate?

There are currently too few large private funds in the Netherlands for early-stage (deep) tech companies or companies where hardware is part of the development. For instance, there are no funds of at least 500 million in the Netherlands. As a result, many deep tech or hardware-based startups are underfunded with too little capital. The CEO and the rest of the management team then spend almost full time raising money. You cannot spend that time on your business and it is at the expense of developing your company.

One actor that can provide really patient capital is InvestNL's publicly funded Deep Tech fund. However, they too need private parties to invest and this dependency can slow down the process.

And another concern is the possible new capital gains tax as a replacement for the current capital gains tax. Indeed, for the really early stage, angel investors are very important. Those new law will make it unattractive for these parties to invest. In addition, startups do not always have the ability to pay talent at market rates. To attract talent anyway, an option plan is part of the compensation scheme. If these are also taxed according to the new government plans, this possibility may be compromised.

Finally, especially for circular enterprises, finding suitable locations and getting the right licence is an issue.

Do you have any advice for the new government that will soon be in charge?

The issues we face now requires people with a real understanding of technology and innovation. Who understand how it works and dare to make appropriate and sometimes perhaps bold choices. When I drive over the Delta Works to Zeeland over the weekends, I wonder if the government would ever again make an investment as big as that. Special ships were developed then purely to make these Delta Works possible. How wonderful it would be if we could do that again in another domain!

Bio Liduina Hammer

Liduina Hammer is fund engineer at Polestar Capital. She is also chairman at Stichting Mibiton and a mentor at the RoundTable for Top Women. After studying finance at the University of Amsterdam, she started her career at APG Asset Management in the alternative investment area. She obtained her Venture Capital knowledge at INKEF Capital which she joined from the very beginning. During that period, she did her executive MBA at RSM. After this, she became fund manager of the proof-of-concept fund UNIIQ, one of InnovationQuarter's funds. Eventually, she became ultimately responsible for the entire investment arm.