London-based investment firm Permian Global Advisors LLP is looking to save the planet, and deliver attractive risk-adjusted returns along the way.
At the CFA Institute's annual conference in Singapore last week, the firm offered a new value proposition: tapping investors to fund large-scale reforestation projects capable of generating returns from carbon-credit sales to corporations facing growing calls to fight climate change.
Permian Global's business plan for addressing the threat of environmental catastrophe from rising levels of carbon dioxide in the atmosphere is very much a market-driven one. At its presentation to CFA attendees, Joseph A. Biernat, the firm's chief investment officer, said the large-scale rebuilding and protection of forests his company's business plan entails will require “capital that only capital markets can provide.”
The formula will work only if Permian can make it profitable, added Stephen Rumsey, the firm's chairman.
In a market where institutional investors are searching for attractive, uncorrelated investments, Permian's Luxembourg-domiciled fund should be able to deliver “fully competitive” returns, in line with private equity, Mr. Rumsey said.
The Permian executives said their modeling assumes it could take roughly four years for their new “financial product” to gain traction among investors.
“I'd like to think that in 10 years, we look more like a utility,” Mr. Biernat said.
