Index Ventures has raised its sixth fund, a 450 million Euro fund, that’s just slightly larger than its fifth. The surprise to many was that Index is doubling down on Europe — a place that’s never given way to many $1 billion companies, even when half the region wasn’t teetering on insolvency.

But that part shouldn’t be a surprise. Index has always had a knack for outperforming VCs in London — riding the open source wave early, placing a relatively early bet on Skype, leading the renewed interest in ecommerce well before it became the rage in New York and San Francisco. This is a firm that knows how to get returns from even the most bleak venture desert.

So given that even Europe still looks good, it’s interesting where Index is not investing with this fund. The one sector and geography to get the boot? Clean tech. “We ended up not doing much in clean tech and we’re glad we didn’t,” said general partner Mike Volpi in an interview with PandoDaily last week. The firm also won’t invest in life sciences out of this fund, but only because there’s a separate fund for that. But when it comes to clean tech, they’re just done, Volpi says.

A lot of VCs have dropped that one like a hot potato, and its biggest evangelists have deemphasized it in their portfolios, most notably Kleiner Perkins and Khosla Ventures. Few VCs were willing to take huge “science fair” bets on the sector, and many of the ones who did weren’t rewarded. Too many of the companies were reliant on subsidies, and most VCs don’t want to be in bed with the government.

Plenty of clean tech companies have operated at the edges of the trend, making software to make energy consumption more efficient, for instance, and avoiding plunging into the unknowns of science and the government. Some of these have done well. And there have been some steady growers in SunRun and SolarCity, which raised a whopping $280 million from Google a year ago. Those may still turn into huge companies. But there hasn’t really been a Facebook of clean tech.

The closest in terms of success and consumer recognizability may be Tesla — a company that founder Elon Musk mostly backed himself. As Musk has said in past interviews, the key was less designing something to appeal to people’s environmental sensibilities and more to be an awesome car you wanted to own. (I’d say that’s the same playbook as The Nest thermostat as well.) Certainly cars are one of the biggest ways consumers have changed their energy behavior. But others in the auto category haven’t fared nearly as well. The stock of once highflying electric battery maker A123 is trading just above $1.30, teetering on bankruptcy.

And Index saying no to clean tech is telling, because Index isn’t one of those firms that only does the social and consumer Web deals. I asked Volpi to name three of the most underrated companies in a portfolio crammed with well known names like Etsy, Path, and Moshi Monsters. These were his picks:

  • Funding Circle: A platform for crowd sourcing small business loans in Europe — just in time for the banking meltdown. It’s in the middle of the big data-disrupting banks movement that we’ve written about a good deal. “It’s growing super fast and addresses the issue of perfectly credit worthy businesses who can’t get loans right now,” Volpi says.
  • PeoplePerHour: An oDesk-like job marketplace for white collar labor, with a development center in Athens of all places.
  • Big Switch Networks: A company that takes the brain of a router and runs it on a server on the cloud. “This is disrupting my old employer, Cisco,” Volpi says. “It does to routers what Linux did to expensive servers.” The cost savings are typically around 25 – 50 percent, but one customer building a large datacenter expects to save 80 percent using Big Switch Networks over Cisco, says Volpi.

We’ll be keeping an eye on all three.