It seems Dallas hedge fund veteran Kyle Bass is looking to corner the market on a rare type of property.
The Dallas-based investment guru is gobbling up property that holds scarce resources in environmentally fragile habitats.
Bass has quietly used the private equity firm Conservation Equity Management to pump over $125 million into his eco-friendly investments.
Bloomberg Wire has the story:
Kyle Bass is spending much of his time these days on a very specific corner of the property market.
Over the past three years, the hedge fund veteran has been buying up land that holds scarce resources and environmentally fragile habitats. In that period, Conservation Equity Management — the private equity firm through which Bass makes the purchases — has allocated over $125 million to such deals. CEM says it’s targeting returns in the “mid-high teens” based on rising property values and money made selling environmental credits.
Now, Bass says there’s enough external investor demand to launch a second venture under the same strategy, only this time he says it will be bigger.
“We’re focusing on mitigating or offsetting physical impacts on the environment,” Bass said in a video interview from his home in Dallas. “And we’re going to make a pretty penny in doing so.”
For Bass, who shot to fame shorting mortgage debt ahead of the global financial crisis of 2008, the investments get him a foothold in a market that so far remains a highly theoretical proposition for most investors, namely the financialization of biodiversity. Covering everything from soil contamination to wetlands management and even insect populations, it’s being billed as the next big frontier in environmental investing.
“We’re bringing the capital markets in to help solve a complex environmental and societal problem,” Bass said. “If we can do that at scale, that’s the holy grail.”