Swiss banking giant Credit Suisse will make its first investment into the sustainable marine sector next month, and will partner on creating investment guidelines for the so-called ‘blue’ sector.
The bank has committed at least $15m to the Sustainable Ocean Fund from London-based Althelia, which claims to be the first vehicle to invest globally in the sustainable marine sector. According to Althelia’s website, the fund was due to reach first close last year, but a spokesperson says it is now aiming for early summer, when it expects to close on the first $50m of commitments.
The European Investment Bank – an existing investor in Althelia – is performing due diligence on participating in the current vehicle, and Althelia says it is in “a number of other advanced conversations” with institutional investors.
The final target for fundraising is $100m, which Althelia aims to achieve next year.
The fund will invest in real assets and management initiatives linked to coastal fisheries, aquaculture and the seafood supply chain, with a view to improving sustainability.
“The climate and broader green space has been growing very rapidly in recent years,” says Fabian Huwyler, Director of Sustainability Affairs at Credit Suisse. “But the marine space has been overlooked for a long time, which means there’s a lot of value in oceans that has still to be captured. There is a growing focus on coming up with investment models that can provide private investors with market-rate returns whilst making a positive impact on the marine environment.”
The underlying fund officially requires a minimum investment of $5m, but Credit Suisse will restructure its own investment into smaller ‘Ocean Conservation Notes’, via a special purpose vehicle, allowing its clients to invest as little as $150,000. It will also offer a secondary market to its clients, on a “best efforts basis”. Fundraising will begin next month and continue through April.Althelia has a similarly-structured Sustainable Climate Fund, which it launched in 2013. Credit Suisse invested €15m in that vehicle, using the same model. For both funds, the bank invests unallocated capital into an in-house, actively-managed, A-rated and above green bond portfolio until it is called by Althelia.
“This seeks to provide a little bit of additional financial upside, and to amplify the environmental impact by ensuring the money is being channelled into green projects even when it is waiting to be called,” explains Huwyler.
Althelia and Credit Suisse will also work together with NGOs Conservation International and the Environmental Defence Fund to create a ‘tool kit’ for other investors wanting to invest in sustainable fisheries and marine conservation.
“It will probably take the form of a report or a website that will come up with best practice investment standards in terms of due diligence, benchmark criteria and relevant metrics,” says Huwyler.
The information is slated for next year, after the Sustainable Ocean Fund has made its first investments, and will be in the public domain.
Last year, it was revealed that Credit Suisse was one of three banks being scrutinised by US, UK and Swiss authorities over the ‘tuna bonds’ scandal in Mozambique. The deal involved the sale of $850m of sovereign bonds to international investors in 2013, to finance a new state-owned fishing firm and develop the tuna fishing industry in the country. Investors later learned that some of the money had been diverted and had instead funded naval ships and security equipment, according to reports. The UK’s Financial Conduct Authority, Switzerland’s Finma and the US Securities and Exchange Commission all confirmed they were looking into the role of the banks – Credit Suisse, Russia’s VTB Group and BNP Paribas – in the transaction.
It all comes as the UK’s Prince Charles is heading up an initiative to get more people worldwide speaking fluent ‘fish and finance’ – i.e. with a sufficient understanding of both topics. His International Sustainability Unit (ISU) has worked on developing the concept of blue bonds.