Aldo bonati
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Transcript of Aldo bonati
www.earthcp.com | Strictly Private & Confidential
EARTH CAPITAL PARTNERS
TBLI Better structure allows for better distribution11th November 2010, London
www.earthcp.com | Strictly Private & Confidential2Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
CONTENTS
• Where have we come from?
• Drivers Behind Sustainable Investment
• Platform & Products
• Investment focus
• Integration of Environment, Social & Governance (ESG)
• Conclusion
www.earthcp.com | Strictly Private & Confidential3Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
CS/Tremont HFRI
S&P 500MSCI World
Barclays Agg. Bond
DJ STOXX 50 FTSE 100
Citi Gov. Bond
CS High Yield II General CB Arb.
Dedicated Short EM
Eq Mkt Neutral
Event Driven Distressed
ED Multi-Strategy Risk Arb. FI
Global Macro Equity L/S
Managed Futures
Multi-Strategy
S&P 500 100% - - - - - - - - - - - - - - - - - - - -
MSCI World 94% 100% - - - - - - - - - - - - - - - - - - -
Barclays Agg. Bond 1% -3% 100% - - - - - - - - - - - - - - - - - -
DJ STOXX 50 78% 81% -17% 100% - - - - - - - - - - - - - - - - -
FTSE 100 76% 81% -10% 86% 100% - - - - - - - - - - - - - - - -
Citi Gov. Bond -2% 9% 57% -33% -14% 100% - - - - - - - - - - - - - - -
CS High Yield II 58% 58% 20% 46% 48% 4% 100% - - - - - - - - - - - - - -
CS/ CS/Tremont 57% 63% 9% 54% 50% 1% 55% 100% - - - - - - - - - - - - -
Tremont CB Arb. 24% 27% 3% 25% 24% -6% 50% 50% 100% - - - - - - - - - - - -
Dedicated Short -77% -76% 7% -57% -59% 2% -56% -54% -28% 100% - - - - - - - - - - -
EM 59% 67% -1% 60% 59% -6% 53% 75% 36% -56% 100% - - - - - - - - - -
Eq Mkt Neutral 38% 44% 4% 28% 32% 17% 32% 42% 36% -32% 42% 100% - - - - - - - - -
Event Driven 60% 66% -7% 55% 54% -7% 68% 79% 58% -61% 70% 44% 100% - - - - - - - -
Distressed 57% 63% -6% 50% 49% -6% 68% 69% 52% -58% 61% 38% 93% 100% - - - - - - -
ED Multi-Strategy 54% 60% -9% 53% 51% -11% 61% 79% 58% -55% 70% 42% 94% 76% 100% - - - - - -
Risk Arb. 48% 54% 1% 38% 41% 11% 48% 54% 42% -51% 52% 37% 66% 55% 64% 100% - - - - -
FI 12% 16% 7% 14% 13% -3% 37% 43% 49% -13% 29% 28% 39% 36% 40% 19% 100% - - - -
Global Macro 22% 26% 23% 24% 22% 3% 25% 73% 33% -15% 50% 34% 42% 36% 44% 26% 42% 100% - - -
Equity L/S 66% 73% 5% 57% 57% 10% 54% 87% 39% -70% 72% 42% 75% 66% 73% 61% 27% 46% 100% - -
Managed Futures -1% 3% 24% -6% -3% 27% -8% 26% -7% 2% 3% 16% 1% 3% -2% -2% 2% 38% 16% 100% -
Multi-Strategy 27% 34% 1% 23% 22% 11% 43% 56% 56% -27% 39% 31% 50% 44% 52% 36% 37% 35% 48% 7% 100%
AVERAGE OF 36M CORRELATIONS
Note: The data provided above for "Equity Market Neutral" does not take into consideration the impact of fraud-related hedge fund blow ups. Correlations are based on monthly performancesSource: Dow Jones Credit Suisse, Bloomberg
31 January 1994 to 31 December 2009
> 60%
< +/-30%
< -60%
Source: Credit Suisse Liquid Alternatives ,Alpha Strategies Group
www.earthcp.com | Strictly Private & Confidential4Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
CS/Tremont HFRI
S&P 500MSCI World
Barclays Agg. Bond
DJ STOXX 50 FTSE 100
Citi Gov. Bond
CS High Yield II General CB Arb.
Dedicated Short EM
Eq Mkt Neutral
Event Driven Distressed
ED Multi-Strategy Risk Arb. FI
Global Macro Equity L/S
Managed Futures
Multi-Strategy
S&P 500 100% - - - - - - - - - - - - - - - - - - - -
MSCI World 97% 100% - - - - - - - - - - - - - - - - - - -
Barclays Agg. Bond 31% 36% 100% - - - - - - - - - - - - - - - - - -
DJ STOXX 50 89% 90% 8% 100% - - - - - - - - - - - - - - - - -
FTSE 100 88% 91% 32% 91% 100% - - - - - - - - - - - - - - - -
Citi Gov. Bond 21% 28% 82% -7% 13% 100% - - - - - - - - - - - - - - -
CS High Yield II 76% 80% 27% 72% 72% 7% 100% - - - - - - - - - - - - - -
CS/ CS/Tremont 70% 78% 15% 68% 72% 10% 76% 100% - - - - - - - - - - - - -
Tremont CB Arb. 61% 68% 28% 63% 68% 0% 82% 85% 100% - - - - - - - - - - - -
Dedicated Short -73% -68% -8% -72% -70% 8% -58% -40% -35% 100% - - - - - - - - - - -
EM 74% 83% 32% 69% 73% 23% 76% 92% 85% -44% 100% - - - - - - - - - -
Eq Mkt Neutral 57% 65% 31% 53% 54% 40% 51% 69% 56% -21% 71% 100% - - - - - - - - -
Event Driven 68% 75% 5% 71% 74% -2% 70% 96% 83% -39% 88% 65% 100% - - - - - - - -
Distressed 72% 76% 0% 73% 72% -6% 74% 93% 81% -42% 84% 59% 96% 100% - - - - - - -
ED Multi-Strategy 64% 71% 8% 67% 72% -1% 64% 94% 80% -36% 86% 66% 99% 90% 100% - - - - - -
Risk Arb. 61% 70% 42% 49% 62% 40% 64% 77% 67% -33% 80% 54% 68% 64% 67% 100% - - - - -
FI 69% 73% 28% 63% 65% 6% 83% 84% 90% -44% 84% 50% 78% 81% 72% 64% 100% - - - -
Global Macro 31% 40% 42% 18% 33% 37% 41% 72% 64% -3% 69% 59% 61% 53% 63% 66% 59% 100% - - -
Equity L/S 76% 85% 24% 75% 82% 15% 72% 94% 80% -50% 92% 69% 91% 85% 91% 81% 76% 65% 100% - -
Managed Futures -17% -13% 2% -23% -11% 23% -26% 14% -12% 12% 0% 18% 6% -2% 11% 13% -15% 48% 12% 100% -
Multi-Strategy 64% 71% 9% 66% 67% -4% 81% 96% 92% -34% 88% 61% 94% 93% 91% 72% 86% 63% 87% -2% 100%
CRISIS CORRELATIONS – A SEA OF RED EMERGES….31 January 2007 to 31 December 2009
> 60%
< +/-30%
< -60%
Note: The data provided above for "Equity Market Neutral" does not take into consideration the impact of fraud-related hedge fund blow ups. Correlations are based on monthly performancesSource: Dow Jones Credit Suisse, Bloomberg
Source: Credit Suisse Liquid Alternatives ,Alpha Strategies Group
www.earthcp.com | Strictly Private & Confidential5Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
CS/Tremont HFRI
S&P 500MSCI World
Barclays Agg. Bond
DJ STOXX 50 FTSE 100
Citi Gov. Bond
CS High Yield II General CB Arb.
Dedicated Short EM
Eq Mkt Neutral
Event Driven Distressed
ED Multi-Strategy Risk Arb. FI
Global Macro Equity L/S
Managed Futures
Multi-Strategy
S&P 500 100% - - - - - - - - - - - - - - - - - - - -
MSCI World 98% 100% - - - - - - - - - - - - - - - - - - -
Barclays Agg. Bond 27% 32% 100% - - - - - - - - - - - - - - - - - -
DJ STOXX 50 88% 89% 8% 100% - - - - - - - - - - - - - - - - -
FTSE 100 89% 91% 28% 91% 100% - - - - - - - - - - - - - - - -
Citi Gov. Bond 25% 31% 78% 0% 18% 100% - - - - - - - - - - - - - - -
CS High Yield II 76% 79% 27% 72% 70% 10% 100% - - - - - - - - - - - - - -
CS/ CS/Tremont 72% 79% 19% 68% 73% 15% 80% 100% - - - - - - - - - - - - -
Tremont CB Arb. 61% 67% 30% 63% 66% 4% 83% 87% 100% - - - - - - - - - - - -
Dedicated Short -77% -72% -3% -71% -71% 7% -57% -46% -36% 100% - - - - - - - - - - -
EM 77% 85% 32% 73% 75% 26% 82% 93% 86% -52% 100% - - - - - - - - - -
Eq Mkt Neutral 61% 68% 28% 53% 55% 43% 54% 67% 54% -32% 70% 100% - - - - - - - - -
Event Driven 73% 78% 9% 72% 76% 2% 75% 96% 84% -52% 88% 65% 100% - - - - - - - -
Distressed 73% 75% 4% 71% 70% -2% 78% 92% 81% -51% 84% 58% 97% 100% - - - - - - -
ED Multi-Strategy 71% 76% 11% 70% 77% 4% 71% 95% 83% -51% 88% 67% 99% 91% 100% - - - - - -
Risk Arb. 64% 73% 40% 52% 65% 44% 67% 79% 69% -37% 82% 57% 71% 64% 72% 100% - - - - -
FI 65% 68% 32% 60% 58% 8% 83% 84% 90% -41% 83% 45% 78% 81% 74% 62% 100% - - - -
Global Macro 29% 37% 48% 15% 30% 41% 43% 70% 65% -4% 66% 53% 58% 50% 60% 65% 59% 100% - - -
Equity L/S 79% 87% 22% 76% 84% 19% 74% 93% 79% -57% 93% 69% 91% 82% 93% 82% 71% 61% 100% - -
Managed Futures -16% -10% 11% -25% -8% 38% -27% 14% -12% 15% 5% 20% 5% -7% 13% 17% -18% 49% 14% 100% -
Multi-Strategy 65% 71% 12% 66% 67% 1% 84% 95% 93% -39% 89% 60% 93% 92% 91% 74% 86% 62% 86% -5% 100%
LAST 36M CORRELATIONS – LITTLE REDUCTION BUT SOME….
30 September 2007 to 31 August 2010
> 60%
< +/-30%
< -60%
Note: The data provided above for "Equity Market Neutral" does not take into consideration the impact of fraud-related hedge fund blow ups. Correlations are based on monthly performancesSource: Dow Jones Credit Suisse, Bloomberg
Source: Credit Suisse Liquid Alternatives ,Alpha Strategies Group
www.earthcp.com | Strictly Private & Confidential6Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
SUSTAINABLE INVESTING
Ethical considerations
Seeking interesting return properties
– Outperformance
– Correlation properties
– Lower risk
Respecting legal or regulatory constraints
Minding one’s reputation as an investor
www.earthcp.com | Strictly Private & Confidential7Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
SUSTAINABLE INVESTING
Thematic approach:
clean energy, clean technology, water and waste water management
Screening:
Negative Screening
exclude environmentally harmful companies
Positive screening
“Best-in-Class”: select environmental leaders in each sector
Engagement:
Establish a dialogue on environmental and sustainability issues with the companies to change their practices.
www.earthcp.com | Strictly Private & Confidential8Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
SUSTAINABLE INVESTING
• “Is environment protection an investment theme for you?”
86.3% of respondents consider environment protection an investment theme, 13.7% do not
Small-size investors are more concerned about green investing than medium size investors
– 100% of small-size investors (AUM <100mn)
– 23.6% of middle-size investors (AUM between 100mn and 10bn) do not consider this factor.
EDHEC-Risk survey released February 201097 European Institutional Investors, approx €300bn AuM
www.earthcp.com | Strictly Private & Confidential9Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
SUSTAINABLE INVESTING
“Is sustainable development a specific investment sector?”
62.1% consider as an investment criterion across all sectors
21.1% consider it as a specific sector
16.8% consider it as both.
Most investors consider screening approaches across sectors rather than or in addition to thematic investments. EDHEC-Risk survey released February 2010
97 European Institutional Investors, approx €300bn AuM
www.earthcp.com | Strictly Private & Confidential10Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
SUSTAINABLE INVESTING
“Do you differentiate between sustainable development (SD) and socially responsible investing (SRI)?”
For 61.9% SD and SRI are two identical concepts.
Among the remaining 38.1% of respondents:
– 60% consider that SRI encompasses issues beyond SD (such as social and corporate governance issues).
– 25% believe that SD encompasses issues beyond SRI.
– 15% think that SRI and SD refer to two distinct sets of issues.
EDHEC-Risk survey released February 201097 European Institutional Investors, approx €300bn AuM
www.earthcp.com | Strictly Private & Confidential11Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
SUSTAINABLE INVESTING
EDHEC-Risk survey released February 201097 European Institutional Investors, approx €300bn AuM
“Some so-called socially responsible investing is effectively PR-seeking and a poor use of fiduciary funds.”
“We are working towards the integration of ESG factors…in order to help create returns that are sustainable in the long-term.”
Different respondents have conflicting views on the motivations behind sustainable investing, as evidence by the following statements of two survey participants…….
www.earthcp.com | Strictly Private & Confidential12Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
SUSTAINABLE INVESTING
EDHEC-Risk survey released February 201097 European Institutional Investors, approx €300bn AuM
50% of respondents consider that a lack of credible standards is the biggest obstacle for them to adopt green investing criteria.
Limits to invest in green business
0,00%
10,00%
20,00%
30,00%
40,00%
50,00%
60,00%
Relatively lowreturns
Higher risk Insufficientoffers
lack ofknowledge
Insufficientinformationabout offers
Lack ofcredible
standards
www.earthcp.com | Strictly Private & Confidential13Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
CONTENTS
• Where have we come from?
• Drivers Behind Sustainable Investment
• Platform & Products
• Investment focus
• Integration of Environment, Social & Governance (ESG)
• Conclusion
www.earthcp.com | Strictly Private & Confidential14Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
Socio-economic security
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21st Century
‘Health’
‘Resource’
En
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Cli
mate
$ $
www.earthcp.com | Strictly Private & Confidential15Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
CONTENTS
• Where have we come from?
• Drivers Behind Sustainable Investment
• Platform & Products
• Integration of Environment, Social & Governance (ESG)
• Conclusions
www.earthcp.com | Strictly Private & Confidential16Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
EARTH CAPITAL PARTNERS LLP
Strong, scalable infrastructure and governance
ECP Platform
CLEAN-TECH / VENTURE FINANCE FUNDS
Join
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ture
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Co
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Ma
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Sp
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(Administration, risk management, sustainability, compliance, etc.)
FORESTRY & AGRICULTURE
FUNDS
RENEWABLE ENERGY FUNDS
WATER FUNDS
ENVIRONMENTAL COMMODITIES FUNDS
Investors
Projects
www.earthcp.com | Strictly Private & Confidential17Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
RENEWABLE ENERGY KEY DRIVERS
Key drivers for renewable energy growth include climate change mitigation, national and regional energy security and increasing energy demand
(1) IPCC (2008)(2) ERSTE Group (2009)(3) EIA (2008)(4) HSBC (2009)
Climate Change Energy security
Increasing demand Economic stimulus
Long-term renewable capacity growth
Oil & gas price volatility(2)Increasing global temperature(1)
Economic stimulus spend (biased to 2009-11)(4)Global energy demand forecast(3)
Other drivers
• Falling costs
• New technologies
• Distributed generation
• Limiting future compliance costs
Other drivers
• Falling costs
• New technologies
• Distributed generation
• Limiting future compliance costs
www.earthcp.com | Strictly Private & Confidential18Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
MARKET OVERVIEW: INVESTMENT OPPORTUNITY
•Sustained and significant investment activity to date(1) – looking ahead, an estimated US$5 trillion investment opportunity to 2030 in new renewable energy capacity globally(2)
(1) REN21 (2009)(2) World Economic Forum, Green Investing
(2009)(3) SEFI (2010)(4) IEA
WEO refers to World Energy Outlook, an annual report by the International Energy Agency. The different forecasts relate to the amount of spend required to achieve different carbon dioxide targets to limit the impact of climate change.
US
$ bn
“…the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply.” (4)
Annual investment forecast to 2030Annual investment in renewable energy (2005-09)(3)
www.earthcp.com | Strictly Private & Confidential19Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
FORESTRY DEMAND DRIVERS
Environmental ServicesCarbon Example - Estimated Annual Carbon Abatement Potential Sources 2030 (4)
Population & Income GrowthIndustrial Roundwood Use per Capita by Region (1)
Energy Efficiency Life Cycle Energy Use Index for Large Storage Structures by Design Type - example (3)
Renewable Energy/ BiomassScenarios for Forecast Global Bioenergy in Primary Energy Supply (2)
Long term global timber demand growth
0
100
200
300
400
500
Wood Steel Concrete
Sources:
(1) FAO SOWF2009(2) EC/IIASA (2007)(3)Athena Sustainable
Materials Institute(4) Vattenfall (2007)
0.0
0.5
1.0
1.5
2.0
Africa Asia LatAm &
Caribbean
Europe Northern
America
Oceania
Cu
bic
Met
res
Strong Growth With Income
2000 20 40 60 80 2100
‘TRADITIONAL’ ‘NEW’
0
20
40
60
80
100
2030
Forestry (25%)
Other
26.7bnT C02
www.earthcp.com | Strictly Private & Confidential20Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
Source: ‘Bioenergy and Earth Sustainability (presentation ESSP workshop)’ IIASA (2008)
LATIN AMERICA & AFRICA: AVAILABLE, SUITABLE LAND
Climatic Suitability for Herbaceous and Woody Lignocellulosic Plants on Available Grass-Scrub-Woodland
www.earthcp.com | Strictly Private & Confidential21Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
ECP FUNDS IN THE MARKET
RENEWABLE ENERGY FUND
• €750m fund deploying capital in the construction and operation of solar and biomass fuelled energy projects
• Europe, the Middle East and North Africa
• Combined skills of ECP and E.ON Climate & Renewables (technical partner)
FORESTRY FUND
• $250m fund deploying capital in mature and green-field timberland (plantation assets)
• Latin America
• Experienced team of private equity and timberland investment professionals
www.earthcp.com | Strictly Private & Confidential22Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
CONTENTS
• Where have we come from?
• Drivers Behind Sustainable Investment
• Platform & Products
• Integration of Environment, Social & Governance (ESG)
• Conclusions
www.earthcp.com | Strictly Private & Confidential23Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
INTEGRATION OF ESG
• Sustainable Development Investment Guidelines
• ‘No-goes’: Primary Forests; High Conservation Value Forests; Critical Natural Habitats
• ‘Minimum Standards’ Sustainable Forest management Practices; Equator Principles; Social Accountability 8000
• Investment process
• Investment Committee TOR
• Earth DividendTM
• Methodology benchmarked against and cross-references to international standards
• SD impact, defining +ve, -ve and neutral impact for 30 ESG indicators
• Resource Consumption; Ecosystem Services; Pollution; Social & Economic Contribution; Society & Governance
• Internal and external assurance
Investment decision making Portfolio monitoring & reporting
Benchmarked to recognised international standards, including IFC Performance Standards and Global Reporting Initiative G3 Sustainability Reporting Guidelines – the global standards for SD performance and reporting respectively
www.earthcp.com | Strictly Private & Confidential24Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
EARTH DIVIDENDTM
• Baseline assessed during acquisition due diligence
• Updated and reported to investors annually
• Provides investee projects with a practical commercially ‘value-adding’ platform to guide sustainability performance
• Provides investors with evidence of impact & performance improvement
Example Earth DividendTM from a Brazilian forestry plantation
-6
0
+6
+6+6
+6 +6
0
0 0
0
Clear measure of the contribution to Sustainable Development
www.earthcp.com | Strictly Private & Confidential25Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
The Earth DividendTM from a bio fuel plantation in Brazil. Example Earth DividendTM from a Spanish PV project
www.earthcp.com | Strictly Private & Confidential26Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
CONTENTS
• Where have we come from?
• Drivers Behind Sustainable Investment
• Platform & Products
• Integration of Environment, Social & Governance (ESG)
• Conclusions
www.earthcp.com | Strictly Private & Confidential27Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
CONCLUSIONS
• Statistics work fine until you really need them…..
• Large scale investment opportunity in sustainable assets
• Institutional credibility & scale with stable, commercial rates of return
• Close alignment to the needs of long term investors with long term liabilities to meet
• Earth DividendTM – effective measure and reporting of impact
• Listen to what your clients want…….
www.earthcp.com | Strictly Private & Confidential28Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.
Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.This material is for distribution only under such circumstances as may be permitted by applicable law. It is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The contents of this document should not be treated as advice relating to legal, tax or investment matters and prospective investors are advised to consult their own professional advisers.
Neil [email protected]
+44 (0) 20 7811 4500
CONTACT
LONDON RIO DE JANEIRO34 St James’s Street R.Ferreira de Almeida, 42St James’s Alto da Boa VistaLondon SW1A 1HD Rio de Janeiro – RJ - Brazil