We sit down with Avent Bezuidenhoudt, the newly-appointed CEO of Earth Capital, to understand her mission as she takes the helm of the boutique impact investor
- CEO, Earth Capital Ltd 2022 – present
- Head of Investment and other roles, Earth Capital Ltd, 2020-22
- Senior Fund Manager, FSE Group, 2011-20
- Investment Manager, South East Growth Fund, 2006-10
- Assistant Director, Corporate Finance, BDO LLP, 1999-2006
- MBA, Open University, 2000-02
- BA, Psychology, University of South Africa 1991-1994
Earth Capital Ltd (ECL) is the sustainable investment manager founded by Gordon Power and Stephen Lansdown, co-founder of Hargreaves Lansdown. ECL invests across the UK and Europe in cleantech companies that address the challenges of climate change across the energy, food, and water sectors.
This week, ECL appointed Avent Bezuidenhoudt as its new CEO to take the business forward to its next stage. Bezuidenhoudt tells us: “We are a new management team. My colleague Elise [Hockley] was appointed chief operating officer this week as well. Essentially, we have launched a new strategy building on our bespoke offering for investors but continuing the principles on which Earth Capital was founded.”
Although Stephen Lansdown remains ECL’s major investor and shareholder, ECL funds come from a variety of family offices and ultra-high net worth individuals who co-invest alongside the Earth Capital Ltd team.
Bezuidenhoudt describes this as “a bespoke boutique approach as each co-investor can be managed in the way that suits them best”.
This syndicate of investors is split between European and UK offices in roughly the same proportion. Deal size is normally around £5 million with Earth Capital Ltd putting in around £1 million and the syndicate contributing the rest of the deal.
ECL’s historic investments have all been UK-based growth stage companies, but Bezuidenhoudt says: “The intention is for us to broaden out our geographical focus across Europe. There are a lot of interesting growth stage companies in Europe particularly looking at the water sector in France, Belgium, and the Netherlands and obviously the many sustainability focused start-ups in the Nordics. However, it will always be about finding the best deal.”
In terms of how to define a “best deal” Bezuidenhoudt says: “The key criteria for us [are] the best technology, the best team, and the best business plan, that come together in a cohesive strategy and that can have a truly impactful outcome in the drive for a more sustainable future.”
ECL does the due diligence for the syndicate on a deal, on occasions bringing in external due diligence providers, and manages the legal work. Bezuidenhoudt adds: “We hold the co-investors hand until exit. ECL also offers teach-ins and roundtables for its investors so that they can fully understand the investments that they’re making.”
Either Bezuidenhoudt or another senior member of ECL’s investment team takes a seat on the board of every company it invests in. She has a long history of working with family offices and high net worth individuals and has always worked on the venture capital side of things. “I like to work on the smaller deals rather than the ones that will be found on the front pages.”
One aspect of ECL’s boutique approach is its impact measurement tool, Earth Dividend, developed by chief sustainability officer Richard Burrett.
According to Bezuidenhoudt, this is “an invaluable portfolio management tool which looks at the value chain of every company which we invest in. It asks the crucial questions – which areas does a company have to address in order to improve its sustainability performance and what actions it should take to make it better?”
This might mean looking at different suppliers, different markets or possibly new materials or component parts. It also looks at how a product is dealt with at end of life to minimise its negative impact after it has been used.
“This tool is of real value for keeping us abreast of changes at our investments” Bezuidenhoudt continues. “It focuses on real issues, and benefits from the fact that we were there long before many other investors. It helped that our founders understood that what we are about is not philanthropy but impact investment with strong financial returns. This is business.”
ECL is looking at whether this proprietary tool is something it could licence out and is in early-stage discussions with other fund managers who want to use it to manage the sustainability of their own portfolios.
Early on, ECL invested in developing four waste energy sites which it has recently pulled together to create a single platform putting in place a new management team and increased funding. The new entity is called Sustainable Energy Holdings Ltd.
Otherwise, Bezuidenhoudt is proud of two investments which have proved to be significant successes. Softiron which she says has “star potential”. Its technology has been developed to provide the hardware and software powering data centres. The sustainability angle is that it uses 80% less energy and 85% less heat than alternative technologies.
The second success is Propelair which Bezuidenhoudt says is “doing fantastically, particularly in the Middle East and South Africa”. Its product addresses the issue that sanitation is responsible for 70-85% of water usage in commercial buildings.
Bezuidenhoudt admits the current level of volatility is a “significant challenge”. The fall in value of the pound is causing concern for UK-based businesses and whilst it should benefit many of the globally focussed companies ECL are investing in “it just creates huge uncertainty for investors”. Likewise, the tripling of energy prices is helping out many sustainable energy companies, but the volatility makes managing them difficult.
“We would very much like to build on what we have created and launch a growth stage venture capital vehicle, but this is [now] planned for 2024. This gives us an opportunity to build our profile with investors and to find good deals.”
As Bezuidenhoudt concludes: “The devastating effects of climate change will only get worse and there is a great need for sustainable finance.”