Ambienta’s Fabio Ranghino explains the private equity investment case for bio-based chemicals, fundraising resilience, and the role of returns in sustainable investing’s enduring appeal
Fabio Ranghino, Partner and Head of Sustainability & Strategy at Ambienta
Milan-headquartered asset manager Ambienta, which manages €4bn across private and public markets, has spent nearly two decades building an investment strategy dedicated to driving environmental transformation, targeting businesses that aim to advance resource efficiency and pollution reduction.
In 2025, sustainability-labeled funds captured almost 13% of all private capital fundraising, totaling approximately $1.3tn, according to Preqin data. Jayda Etienne, Deputy Editor of Preqin First Close, spoke with Fabio Ranghino, Partner and Head of Sustainability & Strategy at Ambienta, about opportunities in the bio-based chemical transition and long-term success in sustainable investing.
We pursue a thematic investment strategy that spans sectors, and invest through private equity, private credit, and public market strategies. In our private equity strategy, which has now been running for 19 years, we make majority investments in manufacturing and service companies across Europe. We target small- to mid-cap businesses, and our ambition is to take ownership and grow those companies through scale-ups, professionalization, the introduction of new managers (where needed), and buy-and-build.
I’ve been with Ambienta since early 2011. Now I’m a Partner, a voting member in all the firm’s investment committees, and a member of the management committee. I lead the strategy and sustainability department, which serves all asset classes across fundamental research, origination support, business due diligence, impact assessment, and ESG integration.
Fundraising has become easier. The first fund was somewhat hybrid because part of the fundraising happened before the financial crisis and it closed afterwards, so the context changed. Fundraising for the first two vehicles was very difficult. People did not understand our investment thesis. We had to explain it in great detail, because the only things many investors associated with sustainability were solar, wind, batteries, and similar sectors, whereas our strategy spans multiple sectors.
Over time, the LP base matured and understanding of environmental sustainability broadened. At the same time, we were able to demonstrate realized returns. So, fundraising improved as a consequence of both a maturing market and our ability to show that you can deliver market-rate returns through sustainability investing.
Investors understand that these are long-term processes and long-term trends, and that investability increasingly depends on economic viability, rather than the mood of the moment. There’s a big difference between the media narrative and the underlying economic fundamentals that determine whether industries are investable. Sophisticated LPs can increasingly see that, and those investors are committed for the long term.
Our diversified and global investor base comprises pension funds, banks, and insurance companies as well as large family offices from around the world. Some have been with us for a long time, and some have joined more recently.
We believe there is strong evidence that the transition away from oil-derived components can increasingly become economically viable. The rising cost of oil and growing awareness of its volatility are creating a more supportive environment for products that rely on bio-based alternatives. This has started with high-value products such as surfactants or bio-based ingredients in cosmetics or personal care – where a small component by weight can command a higher price, making substitution easier to justify economically.
But the adoption process is not linear. There are periods when oil prices fall, which slows the adoption curve and investor interest because it affects margins and the ability of bio-based producers to invest. But some products have already reached meaningful scale. For example, polylactic acid as a consumer plastic is already produced at a significant scale and is economically viable without incentives. That differs from biofuels, where incentives or regulations still play a very relevant role.
At Ambienta, we invest for future appreciation, so it’s important for us to anticipate adoption and build conviction. That way, when we encounter an investment opportunity, we have already understood the risk factors, so we can approach due diligence with confidence. This latest research paper remains valid when thinking 10 years ahead – which would be the end of the investment cycle for the buyer of an asset we might invest in 12 months from now.
In private equity, we recently invested in a company called Agronova. It manufactures bio-based agricultural products for crop nutrition and crop protection. In some cases, these can be used as substitutes for fertilizers – particularly nitrogen-based fertilizers, which are derived from natural gas. It is a niche application relative to the broader role of natural gas, but it is still another example of a transition that is happening without the need for economic incentives, because it already has an economically viable investment case.
In private credit, we have invested in a company that produces a natural alternative to the oil derivative used in industrially baked bread. In Europe, that product has already reached about 60% penetration. In the US, penetration is closer to 15%, so there is still a significant adoption opportunity as ingredients shift from fossil-based to bio-based ones.
Geopolitical shocks and supply-chain disruption create a pressing need for resilience, which can trigger periods of accelerated adoption. But resilience is a powerful mid-term driver more than a short-term one. This is because it requires business owners and corporates to take a view, and possibly bear additional costs now, to avoid a future cost or reduce the impact of a future shock. Management teams do not always have that as a primary driver, especially if the shock has already passed by the time a decision is made, and it’s no longer affecting profit and loss.
If you are a manager with a two- or three-year incentive plan, accepting an additional cost requires a long-term perspective. So yes, these shocks do accelerate adoption, but often not within six months. Each time oil demand increases, the cost of a bio-based product becomes more competitive, making it more attractive to the next buyer, and then the next. That is how the adoption curve builds. As an investor, you need to bear that in mind because the process is not linear. You should expect progress in stages, and to harvest the opportunity created by shocks perhaps three years later, rather than immediately.
It’s the ability to demonstrate that you can achieve market-rate returns alongside measurable environmental impact. That shows authenticity with respect to the mission we set for ourselves and communicated to our LPs. At the same time, we have not asked our LPs to compromise on returns, which has encouraged early investors to increase their commitments and attracted new investors along the way. That is the key, and I think it should be the objective for everyone in this space because it’s the only way to lasting credibility and trust at scale. Capital follows returns. You can deviate from that for a time, but if you want investors to come back consistently, you need to consistently deliver on both strong returns and measurable, material impact.
Jayda is Deputy Editor of Preqin First Close. It’s quick, easy, and free to subscribe here.
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The views expressed are the opinions of Ambienta as of June 2026. They do not constitute an endorsement, recommendation, or any other advice, and are subject to change. The content does not necessarily express the views of BlackRock, Preqin, or any of their affiliates. Ambienta is not affiliated with Preqin.
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