Capricorn Investment Group, which manages the fortune of billionaire Jeff Skoll, has taken a stake in Encourage Capital, an impact investment firm that has developed innovative structures for restoring wild fisheries, managing stormwater and promoting financial inclusion.
Capricorn’s investment is not in any of those specific initiatives but in Encourage, the overall asset-management firm, itself. Encourage was formed last year through the merger of Wolfensohn Fund Management and EKO Asset Management, which together have deployed approximately $200 million in the last five years in environmental and emerging markets companies and assets.
Skoll, the first president of eBay, has increasingly moved Capricorn toward impact investing. Capricorn committed at a White House event in 2014 to deploy $100 million over three years in sustainable real assets, including renewable energy and energy efficiency. The company was an early investor in Tesla Motors and more recently has taken stakes in a number of companies using technology to drive financial inclusion in emerging markets.
Capricorn also manages funds for the Skoll Foundation, which last week convened its annual Skoll World Forum in Oxford.
Encourage has collaborated with Capricorn on real asset transactions involving water, renewable energy, and sustainable agriculture. Ion Yadigaroglu, Capricorn’s managing principal (pictured), praised Encourage’s commitment to finding “that nexus of strong impact and positive investment returns.”
Encourage in recent years has explored innovative structures for financing environmental solutions and financial inclusion. It is moving ahead with some of the financing plans for the recovery of wild fisheries developed with funding from the Rockefeller Foundation and Bloomberg Philanthropies. It has also released investment plans for managing the Colorado River ecosystem and financing stormwater management and other “green infrastructure.”
Capricorn is effectively investing in the general partnership of Encourage itself. Typically, general partners manage funds (and limited partners) and receive fees of two percent of assets under management and a share of profits — 20 percent is standard — of the investments made by the fund.
Other partners in Encourage include the Wolfensohn family and two other families that have not been identified, as well as investors in the former EKO, including Tom Darden, Carter Bales, Aimee Christensen, Sunil Paul, Charly and Lisa Kleissner and Ben Goldsmith.
Jason Scott, co-managing partner of Encourage, said Capricorn’s investment “is a major boost to our efforts to solve critical social and environmental challenges around the world.”