Climate Asset Management, the specialist "natural capital" investment manager formed by HSBC Asset Management and climate change advisory firm Pollination Group, said it has raised $650 million for projects which aim to protect the environment.
The capital raised from institutional investors and corporates is one of the larger amounts to be raised in the nascent market which looks to twin improved environmental outcomes with financial or other returns by investing in nature.
It comes as delegates at a United Nations conference on biodiversity in Montreal this week turn their attention to how to direct more money to protecting and enhancing the world's natural resources.
The funds raised will be invested through two strategies which target different investor bases, CAM Chief Executive Christof Kutscher told Reuters.
Through its Natural Capital Strategy's flagship 15-year Natural Capital Fund, CAM is targeting a 10% return on investment before fees on projects in regenerative agriculture and forestry in developed markets.
Additional revenue may come from selling carbon and biodiversity "credits" linked to the projects, CAM said, which companies and others could buy to offset their climate-damaging carbon emissions.
The Fund has already bought some 30 farms in Spain which it aims to transform into 400 hectares of regenerated farmland to produce almonds while setting aside specific areas to improve biodiveristy.
CAM's second strategy, its Nature Based Carbon Strategy, taps into increasing corporate demand for verifiable carbon offsets and will finance nature-based carbon projects in developing economies.
Its investors are corporates, ranging from some of the top global 100 companies to smaller niche players, Martin Berg, CAM's chief investment officer, said. Rather than financial returns, these investors will receive carbon credits.
"We thought the main target (for the funds) would be institutional investors but we now recongise corporates are key players ... they are really becoming (big) investors in this," he said.
The Nature Based Carbon Fund made its first investment in a project to restore almost two million hectares of land and support 1.5 million smallholder farms in Kenya, Ethiopia, Malawi, Tanzania, Uganda and Zambia.
CAM is targetting $600 million for this fund, dialing back on earlier ambitions to raise $2 billion due to the rapidly changing regulatory environment for caron credits, CAM said. (Reuters)