NatureVest OVERVI VIEW W AND 2 2015 OUTLOOK OOK The information in this presentation is only general in nature. It is not intended as an offer of securities or other investment vehicles and is not investment advice.
NATUREVEST STRATEGIC SUMMARY NATUREVEST generates measurable environmental outcomes along with a financial return TNC’s unit working to deliver conservation impact while also generating financial returns PURPOSE Put to work at least $1 billion of impact investment capital for GOAL conservation Structure transactions that can be replicated and scaled STRATEGY Source impact capital from current and new supporters Share our knowledge and experience to strengthen awareness and support for impact investment in conservation NatureVest achieves this with generous support from JPMorgan Chase, The Robertson Foundation, and the Jeremy & Hannelore Grantham Environmental Trust CONFIDENTIAL NOT FOR DISTRIBUTION
BUILDING THE FIELD FOR CONSERVATION IMPACT INVESTING INVESTING IN CONSERVATION: A landscape assessment of an emerging market RESE SEARCH CH F FOCU CUS KEY KEY F FINDINGS $23 billion conservation impact Private investors expect to • • Illuminate market size and investment (2009-2013) triple capital deployment scope for conservation impact • $21 billion from over next 5 years investing bilateral/multilateral • $2 billion from private actors Obstacle to capital • deployment is lack of deals 3 segments of activity : that meet conservation • RESE SEARCH CH L LAUNCH CH (i) Sustainable Food & Fiber outcome and financial return Production targets and have management (ii) Habitat Conservation track record (iii) Water Quantity & Quality November 6, 2014 launch Conservation in San Francisco The Gordon and Betty Moore Foundation and The David and Lucile Packard Foundation supported NatureVest in this research co-authored with EKO Asset Management in collaboration with J.P. Morgan Chase. CONFIDENTIAL NOT FOR DISTRIBUTION
PORTFOLIO PRIORITIES AND HOW THEY’RE SET Global Conservation Strategy Mapping | Criteria for NatureVest Deals CLI LIMATE 1. Support TNC global strategies LAND ND 2. Conservation activities that generate cashflows WATER 3. Size of the conservation impact and investment opportunity OCEANS NS 4. Replicability of the individual deals CIT ITIES IES 5. Readiness to deploy capital CONFIDENTIAL NOT FOR DISTRIBUTION
PORTFOLIO SUMMARY SHORT-TERM Global Conservation Strategy Mapping | Short-Term Transaction Activities CLIMAT ATE $15M LAN AND $328M $40 $401M 1M . WATER $25M PIPELINE TOTAL + $30M OCEANS $141M CITIE IES $3M CLOSED DEALS CONFIDENTIAL NOT FOR DISTRIBUTION
NATUREVEST SCALING CONSERVATION Closed NATUREVEST TRANSACTIONS represent new models for conservation Great Western Checkerboards Project Sustainable Cattle in Kenya • 167,000 acres • 1.2 million acres • • $134M $7M • Private foundation support • Individual philanthropy & impact investing • Impact investing and philanthropy • 28 conservancies participating • Washington and Montana • 10,000 cattle/year purchased • Partner: Northern Rangelands Trust CONFIDENTIAL NOT FOR DISTRIBUTION
NATUREVEST SCALING CONSERVATION NATUREVEST TRANSACTIONS are growing conservation impact Deal summary • Create a model financing vehicle for local green infrastructure efforts through a performance-based financing facility that can be scaled across 500 cities • Develop green infrastructure projects and sell credits to developers looking for stormwater retention solutions. • Reduce pollution to the Chesapeake Bay, one of TNC’s top priority ecoregions • Increase open space and urban greening in Washington, DC, currently 43% impervious surface, with a focus on low-income communities Financial Information (2/28/15) Investable • Deal size = $3M Capital structure Targets Concessionary debt HNWIs, foundations Washington, DC Equity HNWIs, foundations, family offices Philanthropy HNWIs, foundations CONFIDENTIAL NOT FOR DISTRIBUTION
NATUREVEST SCALING CONSERVATION NATUREVEST TRANSACTIONS are growing conservation impact Deal summary • Purchase 100,000 acre surface estate of critical corridor between two protected areas, and retire surface mining rights on at least 15,000 acres of high conservation value areas. • Transform land use in Central Appalachian coal country – transitioning from surface mining to sustainable forestry, forest carbon and recreation. • Preserve critical habitat corridor in Central Apps biodiversity hotspot and retire mining rights to permanently eliminate risk of mountaintop removal mining. Financial Information (2/28/15) Investable • Deal size = $74M Capital structure Targets Concessionary debt HNWIs, foundations Appalachia Equity HNWIs, foundations, family offices, corporations Philanthropy HNWIs, foundations CONFIDENTIAL NOT FOR DISTRIBUTION
NATUREVEST SCALING CONSERVATION NATUREVEST TRANSACTIONS are growing conservation impact Deal summary • Invest and trade in permanent and temporary water rights in the Murray-Darling Basin with the purpose of providing environmental water to wetlands as well as delivering financial returns to investors. • Prioritize wetlands of significance to Aboriginal peoples, and involve Aboriginal communities in prioritization, watering, and monitoring activities. • Use as a model to influence the adoption of water markets in other geographies including, but not limited to, the Western US, China, and Mexico. Financial Information (1/5/15) Investable • Deal size = $25M Capital structure Targets Senior secured debt Australian Commercial Banks Australia Common Equity HNWIs, foundations CONFIDENTIAL NOT FOR DISTRIBUTION
NATUREVEST SCALING CONSERVATION ENABLING INVESTMENT in nature for all The Conservation Note is The Nature Conservancy’s retail security offering to raise capital to finance conservation efforts around the world allowing investors to earn a return on their investment in nature. Since their inception in 2012, the Notes have furthered the mission of the Conservancy and have conserved 700,000 acres and supported 66 projects including : • A loan to the Iisaak First Nation of Canada to support sustainable timber management in Clayoquot Sound in British Columbia • The purchase of 1,900 acres in Upper Klamath Lake, Oregon to increase fish spawning and rearing habitat. • Leveraging $4 of public money for every $1 of investment to protect the remaining 90,000 acres of native prairie in Minnesota Financial Information (2/15/15) Availability: $4 million Minimum Investment: $25,000 Terms Annualized Return 1 Year 0.40% 3 Years 0.75% 5 Years 1.75% Notes are secured by the full faith and credit of The Nature Conservancy which carries a Aa2 Moody’s bond rating. A Prospectus can be found here: http://www.nature.org/about-us/2015-conservation-note-prospectus.pdf CONFIDENTIAL NOT FOR DISTRIBUTION
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