NewWorld Environmental Opportunities, L.P.

NewWorld Environmental Opportunities, L.P. is being formed to make growth capital and control investments in mid-sized and smaller companies in the environmental opportunities sector, principally in the United States and Canada and, selectively, in Europe. The Fund will seek to maximize economic returns to investors (with a “single bottom line” focus) while concurrently creating collateral benefits to the economy in the form of reduced resource use and cleaner, more sustainable operations.

The environmental opportunities sector benefits from (i) strong underlying market growth, (ii) high rates of business and technology innovation, (iii) increasing resource scarcity and commodity price inflation, (iv) tightening environmental regulations and stronger economic incentives at all government levels, as well as initiatives to (v) promote more efficient resource use, (vi) create a cleaner, less-polluted economy, (vii) improve national energy security, and (viii) reduce greenhouse gas emissions.

NewWorld follows a distinctive investment strategy based on specialized industry knowledge and experience, proprietary opportunity sourcing, an ability to help its portfolio companies succeed in their markets, and explicit risk mitigation. NewWorld will apply its expertise to help companies realize market potential, build strategic relationships to foster growth, and strengthen company management.

Financial description

NewWorld is focused on maximizing returns as a single bottom-line investor. The Firm brings an experience-based high-value, risk-mitigated strategy for investing growth capital in growing companies in growing markets and helping them traverse the “commercialization gap” from smaller proven customer adoption to reach full commercial scale, which is a major value creation event.
NewWorld will follow roughly a “60/25/15” approach in building its Fund’s investment portfolio in an effort to produce high portfolio returns (alpha) while significantly limiting downside risk (beta). Some 25% to 35% of the Fund’s investment dollars will be directed to moderate alpha but very low beta companies (e.g., revenue-contracted with secure supply agreements) in order to produce attractive returns while protecting against downside risk in the overall portfolio. A second 50% to 60% will be directed to more growth-oriented companies, accepting somewhat higher beta in return for significantly higher alpha (growing companies in rapidly growing markets). Approximately 15% of the Fund will be invested in younger companies with sustainably-differentiated products and strong market upside (very high alpha) but typically with significant business-scaling risk. The result should be a a balanced portfolio with high alpha returns yet relatively low beta risk.