Investing in Tech to help us Stay within Planetary means
5.1 Earths – that’s how many we’d need if everyone lived like those in the USA (the Netherlands is 3.6).
Daan van Kassel, CAIA and his team at Polestar Capital are investing in technologies to help us better live within our planetary resource boundaries. Take a listen to our conversation from our micro-podcast series in Copenhagen at The Global Impact Investing Network.
Podcast Transcript
Jacob: [00:00:00] So we’re here at the GIIN, the Global Impact Investing Network investor forum in Copenhagen. And I’m here with Daan. And why don’t you introduce yourself and tell me about the impact you’re looking to make in the world?
Daan: Yeah. So I’m basically, I’m Daan fund manager of the Polestar Capital Circuit Debt Funds.
And Polestar Capital is a fund manager with the mission to bring our economy back within the planetary boundaries. So basically we finance transitions. that supports that journey an e mobility in the circular economy in sustainable housing had to enable the journey towards a sustainable economy.
Jacob: And where are you at in that process?
Daan: Well so personally where I’m at I’m the fund manager of the Circular Economy Debt Fund. What we finance is demonstration plans where a, a new, an innovative technology in recycling or in the bioeconomy is applied for the first time. And at one hand, we still have to apply the fund that we currently raised, but in the past we have financed 14 plants [00:01:00] already.
And what you see there is the, let’s say, the plastic recycling plants that we financed in 2015, 2016. They’re now acquired by big corporations that brought the technology around the globe. And that gives me a well, a lot of satisfaction that we do it for a reason. You know, it’s a big struggle to get the financing in place, to support these, these, these companies to become financeable.
A lot of, a lot of things go wrong in that journey. Yeah. So it may take longer. It may cost more people get into a fight because of stress generated by the returns, not being as they hope for, but if it works ultimately. There’s, you know, a global disruption of value chains to be made, and that has a lot of impact.
And, and the good thing is you can visit the plants that we financed years back, they’re there. The impact is being made at the spot and that’s really cool to see.
Jacob: Give me like a specific
Daan: So I think what’s most exciting to me is that we are now looking at [00:02:00] 187 R& D plants. So it’s basically production facilities that are already out there, but not at commercial scale yet that are making the step towards a commercial scale plant.
And that’s what we could finance. And the innovation is just so wide. I could have not imagined when we set up this fund and that there was so much out there. It’s in alternative proteins. It’s in plastics being made from sewage slip that is eaten by bacterias that create a chemical fats that you can make plastics of..
It’s innovations that I could never have thought actually existed. And that’s really what drives me to be the manager of this fund. At the same time, what’s cool to see is that what we financed in the past, which we now believe is less innovative, for example, Going from plastics to our circling after that’s now happening already at various various companies around the globe.
But at the time that was really a breakthrough and to see that is happening now at large scale with by companies that we financed in the past. Yeah, [00:03:00] obviously that’s also something to be very proud of. So I’m happy in the job that I have.
Jacob: What’s the biggest hurdle you face right now?
Daan: You know, if you do something new, there’s always various challenges to tackle. One of the challenges I think that a lot of the GPs here at the GIIN cope with is that if you do something different, if that can be because you apply capital in a sector that isn’t mainstream. You have to convince people of that story and people need to take the time to listen, to understand it and, to be convinced.
That’s a challenge that almost all GPs invest impact have specifically for our funds, a current challenge is that permitting also but because of inflation competing with traditional value chains. Yeah, those are specific cleanlinesses that we see in the circular economy.
Also regulations are not always clear. So the question, what is waste? Seems an easy question. But it can be that you have a pet bottle in your hand which is recycled, [00:04:00] but technically it’s still waste because it never lost its waste status. It means you can’t export it. You can only sell it in certain ways.
So it has no value and these kind of regulations need to develop quickly to enable actually technology to come to the market. Many challenges. The good thing is it makes it fun as well, because if you can cope with these challenges and bring something to the markets that is able of disrupting the existing value chain, yeah, that’s super cool.
And that’s what we do it for.
Jacob: Where do you see this going? Like what’s the future look like with your fund?
Daan: Well, So we believe the the future must be circular. Why is that? Well, simply because we have doubled our material usage in the last 30 years. And if we don’t, if we don’t make the transition towards a circular economy, we’re going to double our material use again in the next 30 years.
If you look at the interesting thing, we’re in Denmark here today. In Denmark, [00:05:00] they consume four times what the earth can provide for in one year. That’s not a sustainable model. If you bring that towards eight, we’re eating basically the earth alive and that cannot sustain forever. And so something has to happen.
And the circle economy is basically, basically a concept where you disconnect economic activity from negative impacts on the environment. Well, that’s at least the goal. And. Yeah, making steps into that direction is a necessity whether you look at CO2 emissions or nitrogen emissions or chemical compounds in the environment that and all the, all these we, we look at the planetary boundaries from the Pulsar Capital perspective, we have to act within those planetary boundaries to survive as a species on the longterm.
And so It will happen. It will be challenging. It will come in steps. It will take time. But yeah, the future is sustainable. It cannot be different because otherwise, as a species, we have no future.
Jacob: What are you hoping to get out of this conference?
Daan: There are very [00:06:00] interested speakers around.
Various interesting speakers. At the same time, we don’t come for the content here today. My day exists entirely out of networking with LPs that we already knew off with new LPs with peers. I can also hear meet parties like closed loop partners or circularity capital and other venture capital investors in the circular economy space.
We exchange our challenges and our solutions for those challenges and sometimes even leads. And so that’s very interesting. But most of the GIIN for me is around making quick connections to follow up later. And unfortunately, I haven’t really been to the presentations around and I will for sure look a couple of them up online.
But there’s so much to do for me. It’s mainly about a quick introductions, here today.
Jacob: What does an ideal connection look like for you right now?
Daan: So as a fund manager, basically what you do is you connect capital with the people that need it, with [00:07:00] the entrepreneurs that have a yeah, a company that actually lives on impact.
So I’m looking for both, always, right? Now visiting the GIIN is mostly targeting, obviously investors, right? So I had a couple of introduction meetings. The funny thing is also with Dutch parties that I have to meet here because in the Netherlands, for whatever reason, it’s difficult to meet each other.
And basically here it’s about making a quick connection and see, okay, could we cooperate either by co-investing or because you could invest in our funds? Or well, are there potential leads that you can’t serve yourself that we could potentially finance?
Jacob: If an investor or another group wanted to contact you online? Like, how did they find you?
Daan: Well, the good thing is there’s only one person with my name. So if you put it there, they for sure will find me. But if they go to the Pulsar Capital website or PCDF, which is the fund that I’m the fund manager of, or they just Google innovative circular production facility financing, they should be able to find me.
But what’s much more important, I think [00:08:00] if you are an investor and you want to make impact define your strategy, what do you, what, what impacts do you want to make? Think through a true of how you would like to make an impact. So think of your own strategic plan and asset allocation strategy.
And you don’t even have to invest fire poles or capital, but please just invest it in an impact because there’s so many challenges to overcome and there’s so many good investors that can allocate your money in a way and fits your strategy best where a piece of the puzzle, not the only one. So it’s even more important that they. invest in impact and hopefully somebody that we’re a good fit for finds us as well.
Jacob: How would you describe what a perfect fit is?
Daan: So the thing is we’re experts in impact private debt. So if you’re looking for impact private debts and you’re open to investing in the Netherlands, we’re a party to go to have, but we don’t make a transition.
We don’t finance transitions all by ourselves. And so if you for example want to finance a climate tech there’s a role to [00:09:00] play for venture capital. There’s a role to play for private equity. There’s a role to play for private debts. There should be some concessional financing or some potentially governmental funding for building the ecosystems that are beneficial for these climate tech innovations had to come to the market.
So it depends on what you are. Are you a government or an LP? If you’re an LP, do you have a specific impact targets or do you want to outperform risk return wise? And I think everything is possible in the impact space. But given your strategy, there’s, there’s different types of allocations that are the best fit.
So yeah, I hope that people that look for impact private debts will find us, we have a couple of very good impact private debts managers, not that much in the Netherlands, but in other countries that we cooperate with. So if you can’t invest in Netherlands, please reach out as well.
I’m happy to connect you because what’s most important is that capital finds his way into the much needed transitions, whether or not by PoleStar Capital,
Tot ziens
Jacob: Tot [00:10:00] ziens
Daan: It was a pleasure. Thank you very much, Jacob. No,
Jacob: Thank you, Daan. Appreciate it.
Learn more about ISSIMO Story Agency Here