HSBC & Pollination To Create Multibillion And World’s Largest Natural Capital Manager Fund

HSBC Global Asset Management & Pollination Announcement Wed for a multibillion fund for global natural capital projects

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Q2 2020 hedge fund letters, conferences and more

The first of its kind joint venture launches today, between HSBC and Pollination Group to create a multibillion series of natural capital funds.

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Key Messages

  1. HSBC Global Asset Management and Pollination have entered into a joint venture agreement to create HSBC Pollination Climate Asset Management
  2. The venture aims to create the world’s largest natural capital fund, mainstreaming natural capital as an asset class.
  3. The joint venture intends to establish a series of natural capital funds
  4. The proposed group of funds will aim to attract multibillion in total in capital from institutional investors, including sovereign wealth funds, pension funds and insurers into natural capital investments.
  5. The first fund, which aims to launch next year, will look to raise up to USD1 billion followed by a carbon credit fund at up to USD2 billion.
  6. The funds will invest in a diverse range of projects that will preserve, protect and enhance nature over the long-term.
  7. Sustainable investment in natural capital provides exposure to projects focused on nature including:
    • Sustainable forestry
    • Regenerative and sustainable agriculture
    • Water supply
    • Blue carbon (carbon captured by oceans and coastal ecosystems).
    • Nature-based bio-fuels.
    • Nature based projects that generate returns from reducing greenhouse emissions and generating carbon credits

Project examples might include:

    • Regenerative farming practices that improve soil health and biodiversity, creating premium agriculture products, capturing carbon and increasing land value.
    • Sustainable management of forests will also be an opportunity; generating carbon sequestration, sustainable timber sources and land value appreciation.
  1. The joint venture will be led by Pollination’s Christof Kutscher – former Global Chairman of AXA Investment Managers
  2. HSBC Global Asset Management and Pollination are both providing capital and employees for the proposed joint venture.
  3. Measurable impact is a core focus of the venture. Members of the JV team have more than 20 years’ experience in natural capital, which includes due diligence and a detailed assessment of natural capital projects.
  4. A feature of this venture is that it will provide ongoing stewardship for investments, using a proprietary methodology to measure positive long-term impact.
  5. Our shared vision and ambition made it possible to bring this together in just 5 months, over Zoom.
  6. The initial focus is on sustainable investments in existing assets like agriculture and forestry, but as opportunities mature for assets like biodiversity, wildlife, and oceans, the venture will be at the forefront, making these available to institutional investment.
  7. Pollination is a global climate change advisory and investment firm, with a presence across the UK & Europe, US, Asia and Australia.
  8. The combination of our team’s experience is what makes Pollination different. Our people are individually recognised as world leaders across the climate change ecosystem.
  9. The team includes global leaders in climate finance, investment, business, policy and law, with deep government experience.

Pollination client case studies

Examples of the integration of advisory and investment with current clients

BHP Group – announced a $400 million Climate Investment Program, to develop technologies to reduce emissions from its own operations as well as those generated from the use of its resources. Pollination is advising BHP on the strategic direction of the fund, with a particular focus on scaling up low carbon technologies and driving investment in nature-based solutions.

Indonesian Rainforest Bond - assisting the Indonesian Government to design a multi-billion dollar bond to protect Indonesian Rainforest. This builds on the pioneering project that Martijn led in recent years, designing a first-of-its kind, $152million global Forests Bond. Martijn was recognised as FT Asia Pacific Innovative Lawyer 2017 for this project. We are working with a coalition of partners on this project - representative of Pollination’s unique expertise facilitating partnerships across Government, investment, INGO and philanthropic stakeholders to develop creative solutions that solve complex problems.


HSBC Global Asset Management & Pollination Launch Partnership To Create World’s Largest Natural Capital Manager

HSBC Global Asset Management Limited and Pollination Group Holdings Limited, the specialist climate change advisory and investment firm, today announced that they have entered into a joint venture agreement to establish HSBC Pollination Climate Asset Management – subject to regulatory approval. The partnership will aim to create the world’s largest natural capital managerand is the first large-scale venture to mainstream natural capital as an asset class. Industry veteran, Christof Kutscher, will be named Executive Chairman of the joint venture.

HSBC Global Asset Management and Pollination will both provide resources to the planned joint venture and it will operate independently. Through the creation of private funds, HSBC Pollination Climate Asset Management aims to offer investors a wide exposure to global natural capital themes in both emerging and developed markets. The partnership will also provide stewardship and evaluation of the investments, enabling investors to quantitatively measure impact.

The proposed group of funds will aim to attract capital from institutional investors, including sovereign wealth funds, pension funds and insurers into natural capital investments. The first fund, which aims to launch mid next year, will look to raise up to USD1 billion followed by a carboncredit fund at up to USD2 billion. HSBC intends to become a cornerstone investor in the first fund.The funds will invest in a diverse range of projects that will preserve, protect and enhance nature over the long-term.

Sustainable investment in natural capital provides exposure to projects focused on nature including sustainable forestry, regenerative and sustainable agriculture, water supply, blue carbon (carbon captured by oceans and coastal ecosystems), nature based bio-fuels, or nature based projects that generate returns from reducing greenhouse emissions.

Martijn Wilder AM, Co-founding Partner, Pollination said: “To reach the goals set in the Paris Agreement we need to originate and fund new approaches that protect nature, at scale. In a global economy that is on a path to rapid decarbonisation, we regularly hear from investors and organisations looking for investment opportunities that will mitigate long-term climate risk. In natural capital, we’re accelerating investment in an asset class that can help combat climate change and build biodiversity, whilst also generating long-term returns for institutional investors. Investing in the resilience of nature is investing in the resilience of the economy. Nature is the most fertile investment we have.”

Nicolas Moreau, Global CEO, HSBC Global Asset Management, said: “Clients are increasingly focused on environmental matters and this initiative is designed to help them achieve a financial return, while at the same time creating a positive impact on the world’s biodiversity which will be felt for generations to come. Through solutions such as this, we’re helping clients achieve their long-term investment objectives, while meeting their increasing demand to actively contribute to a more sustainable world.”

Sustainable investing represents a growing needand has demonstrated continued growth in recent years, with capital invested in sustainable infrastructure projects increasing by c. 3x (from 2010 to 2018) to c.USD31tn globally1. This announcement follows soon after HSBC Global Asset Management announcing its private investor close for its emerging market HSBC Real Economy Green Investment Opportunity GEM Bond Fund in partnership with the IFC, part of the World Bank.


Notes to editors:

[1] - Global Sustainable Investment Alliance – ‘2018 Global Sustainable Investment Review’

Notes to editors:

For journalists only and should not be distributed to or relied upon by any other persons.

Approved by HSBC Global Asset Management and issued in the UK by HSBC Global Asset Management (UK) Limited, who are authorised and regulated by the Financial Conduct Authority.

www.assetmanagement.hsbc.com/uk

Copyright © HSBC Global Asset Management (UK) Limited 2020. All rights reserved.

Note to investors:

The information contained in this press release does not constitute an offer or solicitation for, or advice that you should enter into, the purchase or sale of any security or fund. Any views expressed are subject to change at any time.

This document is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe to any investment.

Any views expressed were held at the time of preparation and are subject to change without notice. While any forecast, projection or target where provided is indicative only and not guaranteed in any way. HSBC Global Asset Management (UK) Limited accepts no liability for any failure to meet such forecast, projection or target. The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested.  Where overseas investments are held the rate of currency exchange may also cause the value of such investments to fluctuate. Investments in emerging markets are by their nature higher risk and potentially more volatile than those inherent in some established markets. 

Approved by HSBC Global Asset Management and issued in the UK by HSBC Global Asset Management (UK) Limited, who are authorised and regulated by the Financial Conduct Authority.

HSBC Global Asset Management

HSBC Global Asset Management should be referred to in full at all times to avoid confusion with any other financial services firms.

HSBC Global Asset Management, the investment management business of the HSBC Group, invests on behalf of HSBC’s worldwide customer base of retail and private clients, intermediaries, corporates and institutions through both segregated accounts and pooled funds. HSBC Global Asset Management connects HSBC’s clients with investment opportunities around the world through an international network of offices in 25 countries and territories, delivering global capabilities with local market insight. As at 30 June 2020, HSBC Global Asset Management managed assets totalling US$525bn on behalf of its clients. For more information, see www.global.assetmanagement.hsbc.com

HSBC Global Asset Management is the marketing name for the asset management businesses of HSBC Holdings plc.

The HSBC Group

HSBC Holdings plc 

HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. HSBC serves customers worldwide from offices in 64 countries and territories in our geographical regions: Europe, Asia, North America, Latin America, and Middle East and North Africa. With assets of US$2,923bn at 30 June 2020, HSBC is one of the world’s largest banking and financial services organisations.

About Pollination Group

Pollination is a specialist climate change advisory and investment firm, accelerating the transition to a net zero, climate resilient future. The firm brings together global experts in climate investment, finance, strategy, policy, law and technology - connecting dots and linking opportunity where others can’t. Pollination develops holistic, integrated solutions required to address the complex climate agenda. It has a presence in Europe, the United States, Australia and Asia. For more information, see www.pollinationgroup.com