Oceans | May 31, 2024

With new Oceans Engagement Fund, UBS rides the waves of the blue economy

Roodgally Senatus

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ImpactAlpha Editor

Roodgally Senatus

UBS Global Wealth Management is rolling out a blue economy impact fund to invest in 50 mostly small and mid-cap public equities in wastewater treatment, plastic recycling, sustainable aquaculture and other ocean health issues.

The Ocean Engagement Fund, a partnership with Rockefeller Asset Management, is the sequel to a $212 million sustainable oceans equity fund launched by Rockefeller and Credit Suisse, which UBS acquired last year.

The new fund, open to European investors, “is a compelling opportunity for investors seeking uncorrelated returns and ocean health impact via shareholder engagement,” said Casey Clark at Rockefeller, which will manage the portfolio.

Rockefeller, a longtime ocean advocate, will manage the fund and spearhead its engagement with companies on ocean health. “Shareholder engagement has the potential to both deliver positive change and improve profitability of companies,” said UBS’ Andrew Lee.

The UBS Rockefeller fund is the latest in a new wave of ocean-focused funds that are open for investment. Phenix Capital has tracked down 52 blue economy funds that are looking to raise a combined total of €13 billion ($14 billion).

All told, Phenix identified 164 funds that have raised €45 billion since 2015 to invest in SDG No. 14, or “life below water.” More than half are pursuing private equity investments, followed by nearly a quarter targeting public debt and 16% targeting public equity funds. Their biggest investors: foundations, followed by corporations, family offices and banks.

Life below water

The world’s seas, which cover more than 70% of the planet, are critical for heat and carbon absorption, generating more than half of global oxygen supply and serving as a significant source of protein for more than three billion people globally. Centuries of overfishing, plastic pollution, coral bleaching, acidification and other negative climate impacts put all that at risk. 

“Given the immense threats and potential losses at stake, we cannot postpone action and wait for the next technological revolution. We must invest now to mitigate these threats,” Dale Galvin, who was appointed by Pegasus Capital Advisors to manage the Global Fund for Coral Reefs, told ImpactAlpha in a Q&A earlier this month. 

The Global Fund for Coral Reefs has raised over $250 million in grant and equity capital to invest in wild caught fisheries, aquaculture, hospitality and “the circular economy” to protect vulnerable coral reefs and coastal communities, particularly in the Global South.

The fund, which has a $750 million target, is backed by investors including Minderoo Foundation and Builders Vision, both of which also invested in Ocean 14 Capital’s recently-closed €201 million blue economy fund. 

Ocean advisory

The Ocean Foundation, a Washington, DC-based nonprofit that works governments, foundations and other investors to finance ocean conservation projects, will advise UBS and Rockefeller on the ocean engagement fund. 

“Together, we hope to encourage companies to adopt ocean-friendly products, services, or practices,” The Ocean Foundation’s Mark Spalding told ImpactAlpha, “reducing corporate reputation and environmental and social liability risks and improving ocean health which can generate profits and shareholder value.”

The Ocean Foundation has partnered with Rockefeller Capital Management on a series of public equities funds since 2011.