Wind, solar, green buildings, smart grids, biofuel, and clean transport are all striving for attention and investment from a financial community that has rushed to raise increasingly large funds on the grounds that alternative energy is “the next big thing”.

There is unquestionably a need for private capital infusions into alternative energy, and the potential exists for attractive returns. But fund managers must learn that these new businesses have needs very different from the ventures in which private equity has invested in the past.