MENLO PARK -- At a time when many venture capital funds have shifted away from cleantech, the Menlo Park-based Westly Group, run by former state Controller Steve Westly, announced Tuesday that it has closed on a new $160 million cleantech fund.

There are 50 investors in the fund; the three largest are corporate investors Citi, the German utility E.ON and the SK Group of South Korea.

"We are more bullish than ever on cleantech," Westly said in an interview with this newspaper. "Costs are going down, revenues are going up, and we're seeing better business models. People have gotten smarter. And corporate investors are replacing pension funds and university endowments -- they understand how large this market is."

Global clean-technology venture investment plunged to $6.46 billion in 2012, down 33 percent from $9.61 billion in 2011, according to San Francisco-based research and consulting firm Cleantech Group, which is hosting its annual Cleantech Forum this week The low price of natural gas made it harder for renewable energy to compete on cost, and many venture capitalists shied away from capital-intensive deals after seeing companies such as Santa Clara-based Misasolé sold at fire sale prices. Last month, VantagePoint Venture Partners told Dow Jones that it had stopped raising a new fund, initially targeted at $1.25 billion in late 2010, because of lack of interest from limited partners.

"This fundraising in some ways goes against the grain," said Emily Mendell at the National Venture Capital Association. "The fact that it's a cleantech fund is a good thing: There aren't a lot of cleantech funds being raised these days. But successful venture firms often invest in sectors when others pull back."

The most active global cleantech investors are well-known Silicon Valley firms such as Kleiner Perkins Caufield & Byers, Draper Fisher Jurvetson, and Khosla Ventures. Last year, Braemar Energy Ventures announced it raised $300 million for its third fund, which focuses on expansion-stage energy companies. But large global corporations such as General Electric and Siemens are increasingly active in cleantech. MidAmerican Solar, a subsidiary of billionaire investor Warren Buffett's Berkshire Hathaway, stepped in and bought San Jose-based SunPower's (SPWRA) Antelope Valley solar farm.

The Westly group was an investor in Tesla Motors (TSLA), biofuel company Amyris and China Recycling Energy, all of which went public and are trading on the Nasdaq. Another portfolio company, Eka Systems, was acquired by Cooper Industries.

The Westly Group's current portfolio includes several companies, from Lunera Lighting and the Recycle Bank to Oakland-based Revolution Foods.

Revolution Foods provides healthy meals to several charter schools and school districts. In December, Revolution Foods was awarded a $9 million annual contract with the San Francisco Unified School District's 114 schools and 55,000 students.

"We're looking for big ideas, great entrepreneurs and great business models," Westly said. "Some people question if Revolution Foods is really cleantech, but they are changing the world. They are in 12 states and 500 schools."

Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.