Multi-boutique investment firm Haven Green is focused on hand-picking small and unknown managers with innovative ideas and the potential to become the impact and sustainability leaders of the future
- Unique multi-boutique structure to help new and smaller managers connect with investors
- A maximum of 15 managers on the roster to ensure quality relationship
- Deep and narrow focus in direct deals within solar, hydro, wind and battery storage
Finding new and less visible fund managers with impact and sustainability as part of their investment process is both the opportunity and the challenge.
According to Paul Price, founder and CEO of Haven Green Capital Partners, the idea is that these managers will grow and develop to become the impact investing leaders of the future.
Founded last year, the firm connects investors with investment opportunities which offer attractive long-term return potential and also drive positive change in the world.
Haven Green has three strings to its bow. One is helping asset owners on the development of their sustainability policy, which is a good-will service in order to build a longer-term relationships in the area of impact and sustainable investments, Price says. The second area is to work with new, small and innovative managers in the impact space, he adds.
“Haven Green is prepared to go narrow and deep and spend the time it takes to find the best ideas from a positive impact perspective, as investors are keen to find new ideas rather than the next volume play,” he says. Clients will include institutional investors, family offices and other major asset allocators.
The objective is to glean out the most impactful managers, which are often the hardest to find, and also they tend to struggle to scale up when they first start.
“Typically some 70-80% of new managers in the sustainability field fail within the first three years. This is not because they do not have great ideas or cannot produce great returns. It is mainly because they cannot gather enough assets which is where we would come in as an introducer partner,” Price said.
The third element of the business is the consulting side where the firm acts as an ‘introducer’ for companies looking to raise capital. So far, it has been approached by a solar farm in Spain, and two plant-based food manufacturers, among others.
Energy transition is key to Haven Green, with a particular focus on solar, wind, hydro and battery storage. Price argues that the often-mentioned bubble in renewables is in the area of new technology or technology yet to be developed, rather than in those key focus areas.
Price also expresses frustration with the net-zero targets that some companies sign up for. “To achieve these targets, they are putting their faith in technology that in some instances does not yet exist,” he says.
He argues that renewables are also a potentially better LDI [liability-driven investment] match than long bonds because owning an asset directly eliminates the middlemen, as well as generating better returns – around 8-10%, compared to 4-5% for long bonds over the longer term, despite recent price compression and turbulence as a result of the Russian invasion of Ukraine. “I truly think this is the last hurrah for the fossil fuel industry,” he adds.
Russia’s aggression has also brought forward the issue of seeing energy as a national security concern. “This will accelerate the move towards energy independence at a national and pan-European level which will boost renewables,” Price notes.
According to Price, we are in a new era of how we invest. “We are moving away from value, growth and momentum towards super factors, which are decarbonisation, renewable energy and diversity. The traditional categories will not disappear but the focus on the super factors will dominate investor thinking,” Price predicts.
To boost renewables further, in line with recent government initiatives across Europe, Price suggests that direct renewable investment options should be included in defined contribution (DC) pension platforms or government-sponsored auto-enrolment schemes.
“This would help DC pensions automatically create long-term LDI match but [is] also potentially a way of supercharging the allocation to renewables,” he says.
Apart from the managers on its roster, which include names such as Helios Investment Partners, Renewity and Ecofin to name a few, the company is also looking to include an organic farming fund in southern Europe, sustainable private debt options, as well as forestry, agtech and foodtech managers.
“We also insist that each manager has a capacity constraint. We are not taking on any unconstrained capacity managers,” he adds.
At the portfolio manager level, Price says they are looking for diversity on gender and ethnicity where possible and has been somewhat successful relative to the number of managers on the roster.
“This becomes more challenging the more managers you add. We have looked at 46 managers and we have one female-led and one African-led fund amongst our managers but after that it becomes rather predictable,” he says, adding that at least 25 to 30 of the managers they looked at were in the “greenwashing area” by Haven Green’s standards.
Part of the challenge in the impact and sustainability space is that to make a real impact as an equity manager, you want to manage a focused portfolio of 30-35 stocks so that you can have a meaningful conversation with the owners of the underlying companies, he explains. “Over time, your shareholding will become progressively one of the most significant which means that, as an activist, you can influence behaviour.”
Haven Green expects to work with no more than 15 managers, in order to give each of them the best possible chance and attention.
Price hopes that the mission-led organisation will become a benchmark for an industry that is bound to continue developing around impact and sustainability.
However, he insists that his real career is being the carer of a disabled cat called Norah, aka Cleopatra, whom he bathes most nights to the amusement of his adult children. Norah is part of the family’s rescue farm which has 14 cats, as well as numerous dogs and elderly horses – something both inspiring and impactful.