Ultra-wealthy investors looking to direct vast sums of money into green investments (perhaps to atone for 'climate sins') have been joining in a secretive nonprofit dedicated to 'speeding up the flow of capital into investments that can slow global warming,' according to Bloomberg.
The club, Creo Syndicate, works with around 200 families who pay a 'very reasonable' flat fee to join, and must commit to making their first investment in climate and sustainability within six months, according to founder and director, Régine Clément.
Creo's members include investor Jeremy Grantham and Nat Simmons - the son of Renaissance Technologies' billionaire founder James Simmons. According to the report, "Part of building trust with wealthy families is keeping their secrets. In addition to Grantham and Simons, the group’s ranks include other well-known billionaires whose names Creo won’t disclose. A mantra is "no tourists allowed."
"This is not philanthropy, this is investment," said Clément, adding "We grow entirely through introductions. We never seek out a family."
Creo currently has over $800 billion under management, according to the report.
Acting essentially as a mini-investment bank, the nonprofit vets approximately 300 deals per year - connecting member investors with potential partners, while researching technologies for future investments. And because Creo makes no fees on any deals, and ultra-wealthy families 'generally aren't trying to pitch to each other,' "There's not a lot of hidden agendas."
"Members have invested in everything from batteries and hydrogen fuel to regenerative farmland and greener product packaging. Portfolios include still unproven technologies such as methods for carbon capture and true long shots like fusion reactors."
The key to Creo’s success, members say, is how it gets very wealthy investors in the same room—or on the same Zoom call. “You have people with a decade of experience and people with a month of experience,” says longtime member Reuben Munger, a hedge fund manager who founded Vision Ridge Partners as his family office and later turned it into an investment firm. With more than $1 billion under management, it specializes in sustainable assets. -Bloomberg
Those interested in joining Creo must have assets of at least $100 million and pass a board approval process. The investments aren't mainstream, however according to Spring Lane Capital managing director Christian Zabbal, co-chair of Creo's board, "It's fine, because these families are comfortable being pioneers," adding "What Creo is doing today is essentially a preview of what institutional capital will do very shortly."
Creo members make a wide variety of bets that might make a difference—and make money...
Superwealthy families, [says Clément], have an advantage over other players: Managing money for future generations, they can afford to wait a decade or more for investments to bear fruit. Some members in Europe have been rich for hundreds of years. Families “are naturally inclined to think long term,” she says. -Bloomberg
In four years, the nonprofit's membership has grown by 400%, and affiliates' assets have risen eightfold - starting with less than $100 billion in 2016. Growth has been so explosive that Creo has had to double its staff in the past year; 10 in the US and two in the UK. The nonprofit has tried to attract even more capital by approaching large institutional investors who want to participate in green investments, such as CDPQ, a Quebec-based pension fund with $333 billion in assets that has launched a $500 million climate and sustainability strategy.
One family participating in the fund is France's Mulliez family - which owns a global retail empire worth over $38 billion. Family members decided they wanted to 'take climate change more seriously' when it came to their investment portfolio, so they directed their Delphine Descamps, managing director at the Mulliez family office (which invests around $236 million per year) to explore options.
"This space is very broad, and it’s complicated," said Descamps.
The Mulliez family owns a giant supermarket chain, Auchan—basically France’s answer to Walmart. Their conversations with other Creo members led to a decision to concentrate on food in their climate-focused portfolio. Agriculture accounts for about 10% of global greenhouse gas emissions, and better farming practices could fight climate change by both reducing pollution and sequestering more carbon in soils. Sustainable forms of aquaculture, meanwhile, could satisfy demand for protein with far less pollution than other kinds of meat. The family invested in Gotham Greens, an indoor urban farming company, and two companies involved in aquaculture: Kingfish Zeeland, which runs high-tech fish farms, and InnovaFeed, which raises insects as feed for farm-raised seafood.
This year the Mulliez family office led a fundraising round for Hungry Harvest, a startup that sends consumers weekly boxes of produce. When Descamps asked Creo if it knew of any other mission-driven investors looking for deals focused on reducing food waste, she was introduced to Quadia, a Geneva-based impact investor that helped close the $13.7 million investment round in September. -Bloomberg
Another board co-chair, Jason Scott, says that wealthy families want to "be at the front of the parade," and scoffs at the thought that investing in green technologies is becoming a bubble. "You’re talking about changing the way food is grown and transported and what people eat, how energy is delivered to people’s homes, what people drive, the way people build cities," he said, adding "You're talking about a complete reconfiguration of the global economy."
Creo was formed in 2016 after two climate-focused investor networks merged. It was originally an informal gathering for like-minded families. "People would throw down their credit cards for dinner. It was pretty low-rent," said Scott, adding that Clément had "turned it into a powerful platform."
Some of Creo's investments have paid off big, such as Beyond Meat, Tesla, and battery tech company QuantumScape, which was recently valued at $3.3 billion.
"The opportunities are tremendous, but it’s also overwhelming for someone who starts out," said Zabbal. "By investing in collaboration with others who bring expertise, it allows more investors to take the leap."