Carbon finance comes of age (p. 4)
Once persuaded that they could do well for investors too, they formed MissionPoint in 2006. Schwartz, 53, had been a longtime partner at Goldman Sachs, chairman of Goldman Asia, and CEO of Soros Fund Management. Fink, 51, was the former chief operating officer of Priceline and an environmentalist. (Fink and Schwartz have more in common than investing: Their wives both manage organic farms.) Cirilli, 36, had been managing the Fink family's money, devising an investment strategy that is both profit-driven and green. Says Schwartz: "We want to use our skills in a really purposeful, meaningful way."
MissionPoint Capital raised about $335 million, most from institutional investors. Its investments include Sun Edison, a solar energy services company, and a wind power business called Upwind Solutions. Like other suppliers of low-carbon energy, they are poised to thrive if the U.S. regulates greenhouse-gas emissions. MissionPoint is one of more than 50 private equity and hedge funds specializing in carbon finance and clean energy, according to consulting firm ICF International.
This spring MissionPoint announced its biggest deal to date: The company became partners with GE and AES in a new venture called Greenhouse Gas Services, which intends to develop large volumes of emissions credits. These will initially be sold to U.S. companies like Yahoo and News Corp. that want to voluntarily offset their emissions today - firms that have promised to become carbon neutral. Later they can be traded in a compliance market, which is not expected to arrive in the U.S. until, at the earliest, 2012. The company has not announced any deals yet, but the partners say they expect to produce ten million tons of emissions credits by 2010. "We think this is going to be an enormous market," says Kevin Walsh, managing director of GE Energy Financial Services.
Recently Point Carbon, an Oslo-based provider of carbon finance news and analysis, forecast that passage of the Warner-Lieberman bill would create the world's largest carbon emissions market in the U.S., with a market value of $150 billion. As the debate unfolds about just how the U.S. should regulate greenhouse gases, business will have an influential voice. The stakes could not be higher.