Investment

Climate change and family offices – the ones making a difference

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Last week, two private investment offices teamed up with seven institutional investors to fund what has the potential to be one of the biggest breakthroughs in alternative energy ever and in the process do more to stem global warming than any government initiatives. 

The investors are backing Commonwealth Fusion Systems (CFS), which is at the forefront of developing the cleanest and safest energy known – nuclear fusion. Other private investment offices are backing alternative energy ventures, which, if successful, will help in the fight to bring down carbon emissions and slow down, if not reverse global warming. 

But, some argue, if there is a solution to deal with the immense problem of global warming it is more likely to come from initiatives like CFS, backed by funding from concerned private investment offices and institutions than any other efforts

CFC was spun out of MIT’s plasma science and fusion centre, which is the epicentre of global fusion development. The Boston-based company’s CEO, Bob Mumgaard, predicts CFO will have a working power plant in time to combat climate change. “We think we have the science, speed and scale to put carbon-free fusion power on the grid in 15 years,” he said last year. 

The private investment offices backing CFS are Schooner Capital, a venture group/private investment office of the venture capitalist Vin Ryan, and Moore Strategic Ventures, a private investment group set up by hedge fund billionaire Louis Bacon. 

Just in the last year, the issue of global warming has moved up the political and economic agendas of governments worldwide. That is partly to do with the efforts of the Swedish climate change activists Greta Thunberg and the growth of radical environmental protest groups like Extention Rebellion in the UK. 

But, some argue, if there is a solution to deal with the immense problem of global warming it is more likely to come from initiatives like CFS, backed by funding from concerned private investment offices and institutions than any other efforts.

Although clean energy investing has been a prominent investment strategy for some time among family investment groups, in the past, most of this was done indirectly, through limited partners in private equity and venture funds. But today, an increasing number of family offices are investing directly in alternative energy initiatives. Those backing these efforts believe they can make a real difference in tackling global warming. 

Perhaps one of those most committed to these efforts is ZomaLab/Zoma Capital. Based in Denver, Colorado, Zoma is the private investment office founded by Lucy Ana and husband Ben Walton, a member of America’s wealthiest dynasty the Walton family who owns Walmart. 

Last year, Zoma Capital signed a cheque for a sum of C$200 million to back Canadian cleantech investment company Amp Solar Group. The group supports alternative energy and energy-saving groups. It recently invested in Scottish-based Faraday Grid, an energy savings group that is developing transformative technology to allow power grids to handle up to 50% renewables. 

Zoma has also invested alongside the alternative energy asset management group, Vision Ridge Partners, which is backed by Jeff Skoll’s investment office, Capricorn Investment Group, another private investment office at the forefront of funding alternative energy initiatives. Skoll, who helped grow eBay with Pierre Omidyar, backed Elon Musk’s Tesla electric car revolution a few years after the launch of the business. Capricon has also backed several solar panel ventures. 

Also prominent in the alternative energy sector is  Bill Gates’ Breakthrough Energy Ventures, which was set up by The Breakthrough Energy Coalition, a group of some of the wealthiest people in the world committed to tackling global warming. BEV aims to invest $1 billion into radical energy startups capable of drastically cutting global emissions.

In Europe, several family investment groups stand out in funding alternative energy efforts. These include the Austrian-based FSP Ventures, Germany-based Wirtgen Invest, and the UK-based Ceniarth.

 

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