The fund is targeting a final close of €150m and has already made three investments, most recently in clam farming specialist MITO
Ocean 14 Capital has announced it has received €10m from Monaco’s sovereign wealth fund for its impact fund focused on driving a sustainable and regenerative blue economy.
Since its launch last year, the fund has raised a total of €100m and the managers hope to reach a final close at €150bn in the first quarter of next year. Their aim is to invest over three years in 20 to 25 companies that can demonstrate a positive environmental impact and contribute to achieving the United Nations’ Sustainable Goal 14 (SDG 14) – life below water.
Speaking to Impact Investor, Chris Gorrell Barnes, founding partner for Ocean 14 Capital, said that interest in and understanding of the blue economy and the critical role it played in protecting biodiversity and sequestering carbon from the atmosphere had been quite low, but that this was slowly changing.
“The blue economy has been historically overlooked and misunderstood but at last there is movement. The science is clear, if we want to protect people and planet, we need to be doing more to protect our oceans, which provide half the oxygen we breathe, sequester half the carbon emitted into the atmosphere and provide food and employment for millions of people globally.”
The fund’s strategy is to invest in growth-stage businesses across the five verticals of aquaculture, alternative proteins, plastic waste pollution reduction, fisheries and seaweed. Two-thirds of the fund will be invested in companies based in Europe, and the remainder across the rest of the world.
Three investments have already been announced and the fund managers said they were on track to invest in eight companies by the end of the year.
Opportunities in bivalves
Last month, the fund’s announced a €3.8m investment in MITO, a company specialised in the breeding and hatching of clams, with the option invest an an additional €5m to scale and grow the business further.
Gorrell Barnes said the company wants to “build the largest bivalve platform in Europe” and that “MITO marks the beginning of that journey”.
According to Ocean 14 Capital, with a total aquaculture production of more than 30,000 tonnes, the clam industry in Europe is one of the best investment opportunities for the fund, despite bivalves being largely overlooked by investors in the aquaculture sector to date.
“In the aquaculture space, it is rare for people to talk about bivalves, they have mainly focused on salmon, with white fish starting to get a bit more attention. But investment in bivalves is incredibly important. Not only do they provide the leanest and healthiest source of protein available, their impact on the planet is minimal, requiring very little feed, and no freshwater, chemicals or antibiotics and very little maintenance,” said Gorrell Barnes, adding they are also looking at “businesses specialised in mussels and oysters to build on our investment in clams because of their huge impact and economic potential”.
According to research cited by Ocean 14 Capital in the peer-reviewed journal Science, clams also produce less than 2kg of CO2 per 100g of protein, versus the European average of 13kg per 100g of animal protein, and 50kg per 100g of beef protein. In addition, the farmed production of clams is expected to take pressure off overfished wild stocks of clams.
Ocean 14 Capital has a dedicated impact team and 30% of the impact fund’s carry is linked to achieving impact KPIs. The team are broadly targeting four impact goals though their investments, which include reducing marine pollution, protecting and restoring marine ecosystems, reducing ocean acidification and ending overfishing.
An untapped investment opportunity
According to a 2015 WWF report, the oceans are worth $24 trillion and generate $2.5 trillion in goods and services annually, making them technically the seventh-largest economy worldwide.
The number of funds investing in the sector is still relatively small but this is likely to change, as interest grows, explained Gorrell Barnes. “We definitely expect to see more funds coming into the sector but you need the right team, with the broad access and knowledge of an industry that is still quite hard to understand. At Ocean 14 Capital, we’ve got the team and the knowledge.”