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Virgin Green Fund, the first green investment fund set up by U.K.-based Virgin Group, has raised $199 million from two large pension funds — CalPERS, Wolverhampton City Council — and other institutional investors to reach its first close, reports the Financial Times. CalPERS made its investment through PCG Clean Energy & Technology Fund. Macquarie Bank’s Clean Technology Fund is another prominent investor.

The fund was set up last year to make investments in renewable energy and resource efficiency. Like many private equity firms, VGF primarily invests in late-stage projects. It used seed money from Virgin to begin taking stakes in several startups before it had even completed its first round; it currently has seven. Virgin retains a minority stake in VGF’s management company.

VGF is on the cusp of closing a deal worth over $40 million to buy DuraTherm, a Texas City, Texas-based petroleum and metal recycling firm, with Masdar Clean Tech Fund, another green investment fund with $250 million under management.

The fund expects to complete a similarly-sized second funding round within the coming months.

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