The assets essential for living are air, water and food. How do we systematically invest in these, our most important assets? In this interview at SOCAP 2011, Dave Chen, the founder of Equilibrium Capital Group talks about directing capital towards management funds in green real estate, land management, water, energy, agriculture and forestry. His group takes equity stakes in investment firms that have scalable investment strategies in sustainability.
Chen believes that a focus on these natural-resource-related asset classes will have the greatest impact on our sustainable future. One of the companies in his portfolio is Gerding Edlen, a leading green real estate developer of LEED gold and silver buildings. The internal rate of return from this investment was around 22%, not horrible, but this number alone does make a decision maker jump for joy about the payback on a potential investment. However, decision makers are easily sold when they see demonstration projects like a 500,000 sq. ft. medical tower that exports fresh water 10 months out of the year. The building has a built-in sewage treatment system that provides valuable intellectual property (IP) that will be marketable to increasingly water stressed cities.
These assets are only available to institution investors at the moment, but Chen is working on providing access to retail investors as well. To find out more about responsible investing, the UK site Responsible Investor provides data focusing on the Environmental, Social and Governance (ESG) market. It is time to leverage your investments to not only generate financial returns but also assets and technologies for a sustainable future.
Connie Kwan is a Social Entrepreneur based in Silicon Valley, CA. She holds an MBA in Sustainable Management from Presidio Graduate School, and covers stories about triple bottom line businesses and projects. Follow her on Twitter @ConnieMKwan and check here for more video interviews from SOCAP 2011