News Briefs: Cryptocurrency and sustainable commitments from UK SFOs; Late-stage venture deals surge; ESG woes

Souter Investments and Seek Ventures underline new investment directions

Sir Brian Souter’s family investment office, Souter Investments, is getting greener through three deals involving the purchase of companies with a sustainable business approach. It has bought Celtic & Co, a sustainable clothing firm via a buyout where its founders, Nick and Kath Whitworth will remain involved.

Souter has also merged its Climate Care business with its US peer Natural Capital Partners through a deal involving Averna Capital. Both companies advise companies on how to reduce their carbon footprint. 

It has backed Fremman Capital in its acquisition of a majority stake in marine fuel testing company VPS, which helps its clients achieve fuel efficiency. 

Souter has also backed a buyout of phone company TalkTalk, led by Sir Charles Dunstone, and sold its stake in Pet Network International due to its sale by The Rohatyn Group.  Terms for the deals have not been disclosed. 

Meanwhile, fellow UK family office Seek Ventures, owned by the billionaire founder of Moneysupermarket.com Simon Nixon, says it will increase its commitment to cryptocurrencies, according to a Bloomberg report. 

Value of late-stage venture capital skyrockets

A surge of new capital boosted the average value of late-stage venture capital deals by 85% to $914 million in the first half of 2021 according to US data from data provider PitchBook. 

Family offices and venture capital funds are big winners. The increase follows the receipt of liquidity from acquisitions, SPAC and IPO transactions, plus interest in VC from investors outside the sector. 

Early-stage VC deals rose to $20.3 million in the first half – a smaller gain of 35% over 2020 – though still a record. Seed deals rose 11% to $9.7 million. They have steadily grown since 2009, although there is now a perception that the ratings on some opportunities, including those from tech hubs like San Francisco and Boston are expensive. 

ESG investor woes rise with latest probe

 The US and German regulatory authorities are probing allegations by Desiree Fixler that DWS failed to live up to its promise in using ESG criteria at its funds. Fixler used to be head of sustainability at the firm. DWS denied the allegation.

There is no reason to doubt the commitment of DWS to environmental issues over twenty years. But an increasing number of investors are concerned that managers are more interested in getting their ESG credentials for marketing purposes than sustainability, as Family Capital said on 27 July 2021. Family offices are wise to the problem and tend to shun ESG funds. More whistleblowing is on the cards. 

Tariq Fancy, former head of sustainability at BlackRock, criticised ESG earlier this year. He said the system was built to generate investment returns and make a profit-making it hard to save the planet.  

Duncan Austin does not criticise his former employer Generation Investment Management. But he has often said ESG will not solve anything, arguing in favour of sustainable accounting.