The Secret Club for Billionaires Who Care About Climate
Change
Creo Syndicate helps the world’s richest families invest in
businesses fighting global warming.
By Ben Steverman
November 16, 2020, 10:00 AM GMT
A few years ago, the hundreds of members of France’s Mulliez
family, with a global retail empire worth more than $38 billion, decided they
should take climate change more seriously—or rather, their investment portfolio
should.
But where to start? Climate change and the fight against it
could transform almost every sector of the economy as companies clamor for ways
to cut emissions and even pull carbon dioxide from the air. “This space is very
broad, and it’s complicated,” says Delphine Descamps, managing director at
Creadev, the Mulliez family office, which has about €200 million ($236 million)
to invest each year.
Then she met Régine Clément, the head of a small, secretive
nonprofit called Creo Syndicate. An exclusive club of climate-focused
investors, Creo’s mission is to speed up the flow of capital into investments
that can slow global warming. The group focuses on the richest of the rich,
working with about 200 families and investment outfits with a total of more
than $800 billion under management. Prominent members include legendary
investor Jeremy Grantham and Nat Simons, the son of Renaissance Technologies’
billionaire founder James Simons. Members must pay dues—a “very reasonable”
flat fee, Clément says, that makes up about half the nonprofit’s revenue—and
they must prove they’re serious by planning to make their first investment in
climate and sustainability within six months. Members must also have assets of
at least $100 million and get approved by the nonprofit’s board.
When the Mulliez family joined, its staff met with experts,
experienced climate-focused investors, and other family offices, who were
surprisingly candid about what they’d learned. At online seminars and in-person
meetings with carefully selected groups, often with fewer than 20 people, they
discussed innovations in agriculture and other areas that may cut emissions
while feeding a growing population. “People openly talk about their investments
and what worked and what didn’t work,” she says.
“This is not philanthropy, this is investment”
Although it’s a nonprofit and doesn’t have any money of its
own to deploy, Creo acts a little like an investment bank, vetting about 300
deals per year, connecting investors with possible partners, and conducting
research on technologies. Members have invested in everything from batteries
and hydrogen fuel to regenerative farmland and greener product packaging.
Portfolios include still unproven technologies such as methods for carbon
capture and true long shots like fusion reactors.
Creo members make a wide variety of bets that might make a
difference—and make money. “This is not philanthropy, this is investment,”
Clément says. Superwealthy families, she says, have an advantage over other
players: Managing money for future generations, they can afford to wait a
decade or more for investments to bear fruit. Some members in Europe have been
rich for hundreds of years. Families “are naturally inclined to think long
term,” she says.
Many of the investments aren’t mainstream, but “it’s fine,
because these families are comfortable being pioneers,” says Spring Lane
Capital managing director Christian Zabbal, who co-chairs Creo’s board. “What
Creo is doing today is essentially a preview of what institutional capital will
do very shortly.”
The Mulliez family owns a giant supermarket chain,
Auchan—basically France’s answer to Walmart. Their conversations with other
Creo members led to a decision to concentrate on food in their climate-focused
portfolio. Agriculture accounts for about 10% of global greenhouse gas
emissions, and better farming practices could fight climate change by both
reducing pollution and sequestering more carbon in soils. Sustainable forms of
aquaculture, meanwhile, could satisfy demand for protein with far less
pollution than other kinds of meat. The family invested in Gotham Greens, an
indoor urban farming company, and two companies involved in aquaculture:
Kingfish Zeeland, which runs high-tech fish farms, and InnovaFeed, which raises
insects as feed for farm-raised seafood.
“You’re talking about a complete reconfiguration of the
global economy”
This year the Mulliez family office led a fundraising round
for Hungry Harvest, a startup that sends consumers weekly boxes of produce.
When Descamps asked Creo if it knew of any other mission-driven investors
looking for deals focused on reducing food waste, she was introduced to Quadia,
a Geneva-based impact investor that helped close the $13.7 million investment
round in September.
Creo’s families want to “be at the front of the parade,” says
Jason Scott, a board co-chair. He bristles when people suggest climate-focused
investing is becoming a bubble. “You’re talking about changing the way food is
grown and transported and what people eat, how energy is delivered to people’s
homes, what people drive, the way people build cities,” he says. “You’re
talking about a complete reconfiguration of the global economy.”
When Creo was formed five years ago from the merger of two
climate-focused investor networks, it was just an informal gathering for
like-minded families. “People would throw down their credit cards for dinner.
It was pretty low-rent,” Scott says. Clément became Creo’s founding chief
executive officer in 2016. “She’s turned it into a powerful platform,” Scott
says. “There’s almost an insatiable demand for the kind of support Creo is
providing.”
In four years, the nonprofit’s membership has quadrupled,
and its members and affiliates’ assets have risen eightfold, from less than
$100 billion in 2016. To keep up with the demand, Creo’s staff has doubled in
the past year, to 10 in the U.S. and two in the U.K. The group doesn’t go out
and recruit members. “We grow entirely through introductions. We never seek out
a family,” Clément says. Although Creo doesn’t require applicants to divest from
fossil fuels or other emitters, she wants to make sure all members are fully
committed to the mission. Part of building trust with wealthy families is
keeping their secrets. In addition to Grantham and Simons, the group’s ranks
include other well-known billionaires whose names Creo won’t disclose. A mantra
is “no tourists allowed.”
The key to Creo’s success, members say, is how it gets very
wealthy investors in the same room—or on the same Zoom call. “You have people
with a decade of experience and people with a month of experience,” says
longtime member Reuben Munger, a hedge fund manager who founded Vision Ridge
Partners as his family office and later turned it into an investment firm. With
more than $1 billion under management, it specializes in sustainable assets.
It helps that families generally aren’t trying to pitch to
each other and that Creo makes no fees on any deals. “There’s not a lot of
hidden agendas,” Zabbal says. Creo has tried to unlock even more capital by
venturing beyond families to large institutional investors that also want a
head start on climate investing. The nonprofit is working with CDPQ, a Quebec
pension fund with $333 billion in assets, which launched a $500 million
investment strategy around climate and sustainability. The pension’s goal is to
invest alongside families or firms in late-stage venture companies. The first
deal, announced in September, is with S2G Ventures, a Chicago firm focused on
food and agriculture that’s backed by Lukas Walton. An heir to the Walmart
fortune, he has a net worth estimated to be more than $22 billion by the
Bloomberg Billionaires Index.
Creo members have seen their investments pay off.
QuantumScape Corp., a battery tech company recently valued at $3.3 billion,
received early funding from Prelude Ventures—co-founded by Simons—and Capricorn
Investment Group, both Creo members. Participants in the nonprofit also
invested in early rounds of Tesla Inc. and Beyond Meat, two of 2020’s
best-performing stocks. This kind of success helps convince skeptical family members
and advisers of what Creo can do.
“The opportunities are tremendous, but it’s also
overwhelming for someone who starts out,” Zabbal says. “By investing in
collaboration with others who bring expertise, it allows more investors to take
the leap.”
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