ImpactAlpha, February 10 – Private equity firm Ecosystem Investment Partners has been helping investors profit off of ecological restoration and conservation projects since 2007. EIP has raised nearly $1 billion from investors through three institutional funds, including $454.5 million for its latest fund, Ecosystem Investment Partners IV.
EIP’s investment approach is to set up “mitigation banks” on acquired land that both finance wetlands restoration and build “credits” that public and private developers can buy to offset expected environmental damages from their development projects (see, “Ecosystem Investment Partners: How Private Capital is Restoring U.S. Wetlands”). It’s a system that effectively trades damage in one place with restoration in another (sort of like a carbon exchange.)
The firm claims mitigation bank transactions have increased by over 2,000% in the past 25 years (see, “The surprising leader in the $36 billion global market for ‘payments for ecosystem services’”).
EIP also invests through pay for success contracts.
EIP has invested in 44 projects in 12 states covering 44,000 acres of wetlands and 176 linear miles of streams, including a 110-mile expanse across five counties in West Virginia and an 18 miles of feeder waterways into the Chesapeake Bay that, if successfully restored, will reduce harmful nitrogen and phosphorus levels.
Its target investment size projects costing $10 million to $50 million. It ensures permanent protection through conservation easements and deed restrictions.
Before raising its fourth fund, EIP raised $303 million for fund three and $181 million for fund two.
The firm has added four new members to its team to support its fourth fund.