Carbon Pulse | 9 February 2024
Ex-Blackrock executive prepares land-focused natural capital strategy at food investor
By Thomas Cox – [email protected]
Sustainable food and agriculture investment firm Cibus Capital is preparing to launch a natural capital strategy to restore degraded land led by an ex-Blackrock Alternatives executive.
Kristen Weldon joined London-headquartered Cibus Capital in a new position as head of natural capital, from a previous role at Blackrock Alternatives as global head of sustainable investing.
She hopes to launch a dedicated private natural capital vehicle in the second half of 2024, with 10 to 15 investments, distinct from the existing two funds at Cibus, she told Carbon Pulse.
Focus areas for the strategy will include sustainable soil, timber, and oceans, she said
“The space that’s really interesting right now is fostering the best use of land, and ecosystem restoration.”
“Our intention in a new vehicle is to actually invest into natural capital projects, and partner with project developers to really grow and scale those projects to deliver nature-based solutions, and potentially produce carbon credits,” she said.
The Cibus funds, advised by investment manager ADM Capital, are made up of venture strategy Cibus Enterprise and larger private equity strategy Cibus Fund II.
Advisor to the funds, Cibus Capital has raised over $1 billion since its 2016 launch. It said it could not reveal the exact value of assets in its funds, as it is fundraising, but confirmed that it agreed to sell Spanish olive oil company Innoliva for more than €300 million last year.
Weldon said a target figure for the natural capital strategy was in development, but that it would target institutional investors – investing larger sums of money – with a total value of assets below the sum in Cibus Fund II.
SOIL HEALTH
Opportunities for the new strategy are developing in the UK, Europe, Australia, and the US, she said.
The investor would both buy degraded land to restore it – similar to Climate Asset Management – through activities like rewilding, while also working with land owners for improved nature-related outcomes, she said.
“That land might be degraded due to over-farming, cattle grazing, being abandoned – practices that have led to the soil really performing poorly, not sequestering carbon and not being able to really retain water.”
Revenue could come from improving the value of land to make it more productive before selling it, regenerative agriculture, sustainable timber, and carbon credits, she said.
In Europe, farmers protesting across several countries won a delay from the EU to a requirement to set aside land to encourage biodiversity last month.
UK LEADER
In the UK, Cibus could participate in its biodiversity net gain (BNG) market by generating units from habitat banks or biodiversity credits, she said. BNG requires developers to improve biodiversity by at least 10%, with rules set to come into force on Feb. 12.
“The UK has great potential to be a leader in this space and show a number of other developed countries how this is possible, how to make it a strong economic model for all the participants involved,” Weldon said.
A key debate in natural capital has been over whether the market can be mainstreamed to channel larger sums of capital. Broader uptake of the UK’s methodology could help catalyse nature-related investments by clarifying how biodiversity is measured.
Weldon said natural capital can be mainstreamed. “Private capital will come into this space. If you look at the space versus a year ago, there’s already many more offerings for institutional and retail investors.”
“I expect that to continue to grow. It’s a very positive and collaborative ecosystem of investors.” The Kunming-Montreal Global Biodiversity Framework called for at least $200 bln in financial flows for nature by 2030.
Cibus is working out the finer details of the strategy but is already considering prospective investees, she said.
