Greenscape Capital – a green business portfolio

Investing in small, growth businesses before they float on a stock market is usually a difficult task for many private investors. Unless you are willing to inject six-figure sums into a business, many small companies will not consider your investment. Meanwhile, do you really want to tie up that much cash in an illiquid investment?

London’s Alternative Investment Market quotes the shares of a number of investment businesses – Braveheart, IP Group and Imperial Innovations for example – that offer investors the chance to own a piece of an investment vehicle that owns a basket of investments in growing technology firms. However, there is only one AIM share – Low Carbon Accelerator – that has an overwhelming focus on emerging environmental technology businesses.

But environmentally-minded investors hungry to get exposure to early-stage green firms might consider a share quoted on the Toronto Stock Exchange: Greenscape Capital. This share offers investors exposure to a portfolio of environmentally-friendly growth companies that are based in North America.

Greenscape’s core investment is in its wholly-owned subsidiary, Green.Switch Capital, which is a full-service energy retrofitting firm.

Vancouver-based Green.Switch works with companies keen to take measures that reduce their impact on the environment while also reducing their energy costs. The company offers what it describes as ‘a one-stop shop’ of products and services for clients. This includes an assessment phase involving consulting, site assessments and planning in order to show the client what can be achieved with energy efficiency measures at their sites. But it also includes implementation of the retrofit and financing of the project  in which Greenscape then gets to participate in the energy savings. After implementation, Green.Switch continues to manage and monitor the performance at each site where it has implemented an energy retrofit.

The company has already embarked on projects for a number of clients. One is Robbins Parking Services, the second-largest parking management company in Canada with around 200 lots on Vancouver Island alone. Once the first phase of the Robbins contract is completed, Green.Switch expects to expand to other potential Robbins Parking sites

At Queen Charlotte Lodge, a salmon fishing resort located in a remote part of British Columbia, Green.Switch is helping this self-sufficient business to keep a lid on its energy costs – a key budgetary concern for the resort. Green.Switch recently completed a detailed review of the lodge’s operations and has officially been contracted to provide upgrades to achieve what it estimates as substantial cash savings.

At the lodge Green.Switch plans to install alternative energy systems, either based on wave  or geothermal power. This should give the company some useful publicity in Canada and in North America in general where the Queen Charlotte Lodge is a national icon that attracts a number of chief executive officers of global businesses and is also monitored by other high-end, isolated adventure resorts worldwide.

Greenscape has high hopes for Green.Switch, and points out that there is a rapidly growing demand from businesses that want to go green for profit-driven and/or ethical reasons. The company also believes that in both good and bad economic conditions businesses want to be viewed as ‘green’ providing them with a   differentiating factor in marketing.

But a key driver of the retrofitting market is likely to be the cost savings that will be achieved. In the US an initial combined investment of $520bn into energy efficiency through to the year 2020 would yield $1,200bn in energy savings (source: McKinsey).

A recent deal made by Greenscape that promises plenty of potential was an agreement signed in January for Greenscape to build, own and operate the world’s greenest parking facility at Denver International Airport, the US’s fifth busiest airport. According to the company, the 4,200-stall lot – in which it will hold a 90% stake – has a projected net operating income of $5.1m per year. The lot, with a 7 month construction window, has an appraised book value over $30M US once completed.

The DIA Green Park will require an investment of $18.6m, of which $12.1m is to be financed via a debt arrangement which is being arranged by a chartered bank in Canada: RBC Capital Markets..

Apart from Green.Switch and the DIA Green Park, Greenscape also has investments in four other businesses, three of which can be described as green, which gives the investor further exposure to different businesses in the green sector.

The firm has announced several contracts during the past six months. In December, it signed new energy retrofit contracts for 11 large commercial buildings that are projected to be worth a projected $26m to the company, while the month before the company announced that it had signed $6.7m of retrofit contracts in British Columbia.

Greenscape’s potential will depend on future progress made by Green.Switch in signing energy retrofit contracts, but the firm has more green strings to its bow that might surprise.

http://www.proactiveinvestors.com.au/companies/news/6273/greenscape-capital-a-green-business-portfolio-6273.html