German family office Wermuth Asset Management has hit an initial close on a €250 million private equity fund that will invest in resource-efficient and renewable energy companies across Europe, according to people familiar with the matter.

The vehicle is one of the first private equity funds to include an annual "impact" hurdle on investments tied to sustainability targets, as well as a traditional return hurdle on carried interest, the share of profits received by the investment managers. Hurdles are minimum returns that have to be achieved before private equity managers are paid.