Ecosystem Investment Partners III, L.P.

Headquartered in Baltimore, Maryland, Ecosystem Investment Partners (“EIP”) is a private equity firm established in 2006 to make investments that capitalize on the Land-Based Environmental Offset (“LEO”) markets established to offset or “mitigate” unavoidable, permitted impacts to wetlands, streams and other important natural resources throughout the United States. EIP’s primary investment focus is on large-scale mitigation banking opportunities enabled by the federal Clean Water Act of 1972 (“Clean Water Act”) and Endangered Species Act of 1973 (“Endangered Species Act”). In order to capitalize on the LEO markets, EIP acquires, entitles, restores, sustainably manages and ultimately divests large rural properties that generate revenues through the sale of wetland, stream, endangered species and other environmental credits to entities seeking compliance under these and other environmental regulations that require offsets to unavoidable impacts.

Ecosystem Investment Partners III, L.P. (“EIP III”) is targeting $200 million of capital commitments to invest in these LEO opportunities. On an unlevered basis, EIP III will target a gross IRR and multiple of 16% and 2.5x and a net IRR and multiple of 12% and 2.2x, respectively. Current income generated by the sale of mitigation credits and other ancillary land-based revenues is expected to represent at least 75% of the total return.

Financial description

The EIP team of ten professionals brings a breadth and depth of experience in all aspects of the investment strategy, including rural real estate investing, private equity fund management, conservation finance, ecosystem engineering and restoration and environmental policy. Additionally, EIP has assembled a world-class Advisory Board to enhance and further complement the skills of the core team.
Ecosystem Investment Partners II, L.P. (“EIP II”) closed in May 2012 with $180.7 million of capital commitments. EIP II has completed seven investments to date and, including two potential investments under contract and reserves for existing investments, is essentially fully committed. With an aggregate weighted average holding period of only 1.8 years, EIP II has begun making distributions, returning $6.6 million to limited partners through December 31, 2014 and a total of $13.2 million through April 2014.
In 2007 and 2008, EIP invested in three properties, collectively referred to herein as “EIP I,” totaling $27 million of contributed capital. These investments were capitalized on a deal-by-deal basis by certain EIP professionals, a timber investment organization, a private capital fund-of-funds manager, foundations and high net worth individuals.