Natural Capital Fund
To spur the creation of the necessary institutional capacity for the development of the conservation economy, Ecotrust has created the Natural Capital Fund. The Fund makes investments in key sectors, businesses and projects which significantly enhance the capacity for appropriate development and conservation in the coastal temperate rain forest region. The Fund is intended to serve as a catalyst, leveraging other investments through partnerships, joint ventures and other collaborations. As the ventures mature and are able to access other sources of funds, such as bank financing, the Fund investment will be recovered and redeployed.
Investment Objectives
The primary objective of the Natural Capital Fund is to create the organizational capacity for conservation-based development in the region. The secondary objective is to provide organizational and program support for Ecotrust. Funds will be invested primarily in the initiatives Ecotrust and its partners have forged to create capacity for economic development, understanding, policy reform and conservation. Investments will also be made in other projects, businesses and initiatives which further Ecotrust's mission and strategies. Investments will share the following characteristics:
- Strongly catalytic - Investments will be catalytic in two ways. First, the businesses and projects invested in will have high conservation-based development "multipliers"; that is, they will stimulate the demand for and supply of other initiatives. Second, Natural Capital Funds will be used strategically to attract additional funds through partnerships, collaborations, subordination and risk mitigation.
- Capital recovery - In most cases, investments should provide for full capital recovery within five to seven years.
- Early entry, early exit - The Natural Capital Fund will help launch strategic ventures. Once launched, the Fund will generally seek to redeploy the investment funds as quickly as possible to launch new ventures.
- Income earning - Current income expectations for the Fund will be moderate and secondary to the creation of conservation-based development capacity. However, the portfolio will be structured for modest current income (2–3% overall return) which will, over time, fund key Ecotrust programs and the costs of managing the fund.
Storytelling
Investments, individually and in aggregate, should tell a coherent and compelling story about the conservation economy, both to illustrate and inspire and to attract new capital to the Fund. The expected return on investment will consist of financial returns and social and environmental returns.
