The investment arms of a Dutch bank and a Canadian pension fund are preparing a series of large natural capital funds focused on real assets that will launch on a new platform, expected to go live next year.
Triodos Investment Management and Fondaction Asset Management have partnered on developing the platform, which will host natural capital-related funds of institutional size, typically in the hundreds of millions of dollars, they announced this week.
“The platform will consist of a series of funds, which will be launched in sequence, incremental in size,” said Hadewych Kuiper, managing director at Triodos Investment Management.
“Our aim is to realise a closed-end platform with different impact investment solutions in relation to nature, biodiversity and climate resilience, which over time will grow to a size that can cater to requirements of institutional investors,” he told Carbon Pulse. Closed-end funds have a fixed amount of invested capital, unlike open-end funds.
Impact investment-focused Triodos IM managed €5.7 billion as of the end of 2023. Fondaction managed over C$480 million (€325 mln) as of November last year, in environmental areas including natural capital.
Biodiversity-specific funds passed $1.5 bln by the end of 2023, with eight vehicle launches throughout the period despite relative underperformance across the board, Carbon Pulse analysis found in March.
In addition to these funds there are an increasing number of strategies focused more broadly on natural capital in areas such as sustainable agriculture.
The Triodos-Fondaction platform will aim to “ensure that we improve biodiversity, something which is scarcely covered by currently available investment solutions for institutional investors”, Kuiper said.
Most of the biodiversity-focused funds invest in listed companies with reduced nature impacts, without disclosing their nature footprints.
“The closed-end platform will invest private capital in projects and organisations active in biodiversity, nature, and climate resilience. For instance in landownership or companies and projects holding real assets,” Kuiper said.
“The platform will focus on addressing the finance gap for biodiversity and natural capital solutions in developed markets, taking into account the highest sustainability standards and strict minimum criteria.”
The Triodos-Fondaction platform will focus on:
- Gathering like-minded individuals, organisations and communities
- Developing and sharing a robust understanding of sustainable finance
- Influencing policymakers to promote transparency
“Through this collaboration, we can demonstrate the scalability of solutions that address the dual climate and biodiversity crises with integrity,” said Marc-Andre Binette, vice-president and general manager of Fondaction Asset Management.
By Thomas Cox – t.cox@carbon-pulse.com
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