Martijn Wilder, who until recently and for the past 20 years was head of Baker McKenzie’s global climate change practice, has partnered with London-based investment banker Tony O’Sullivan to launch Pollination, an investment and advisory firm dedicated solely to energy transition reports sister publication Infrastructure Investor.
The decision to establish the firm “arose out of the observation that there was a tremendous amount of capital being allocated towards both climate change finance and broader green, ESG investment, but a lot of the money wasn’t necessarily flowing into the solutions”, Wilder, who was also a founding director of Australia’s Clean Energy Finance Corporation, told Infrastructure Investor in an interview.
In addition to infrastructure, the firm will have a strong focus on investing in the protection of natural capital, one of the two areas – water security being the other – it considers to be critical from both a societal and economic perspective. That includes safeguarding reefs, forests and mangroves, for example, as well as investing in climate-smart agriculture.
Pollination comprises five business lines, including a merchant banking division, a non-profit organisation and a venture capital unit. At its core, though, are its advisory arm, Breakthrough Advisory, and its infrastructure investment platform.
“Through our Breakthrough Advisory arm, we’re working in assisting governments with their transition,” Wilder explained. “These governments that have legislated, for example, to be net zero [emissions] by 2050 will need to change entire economies within the next 30 years; that’s trillions of dollars of economies changing in a relatively short period of time.”
Tony O’Sullivan, the firm’s other co-founder, who previously served as head of investment banking at Lazard in Sydney, added: “Having Breakthrough Advisory as an integral part of Pollination enables us to look around corners and find highly scalable investible propositions that we believe others simply cannot see.”
The firm is also advising corporates, such as multinational BHP and New Zealand’s The a2 Milk Company, as well as private equity firms as they and their portfolio companies need to comply with mandatory climate reporting and ESG criteria.
On the investment side, the firm will seek to raise $3 billion across its infrastructure platform as well as $1 billion for co-investments. It will target investments in Asia-Pacific in both developed and emerging markets, in many of which, according to O’Sullivan, the middle class is experiencing double-digit growth and urbanisation is steadily increasing.
Initially, the firm considered raising capital for three funds – Transformative Infrastructure, Digital Infrastructure and New Climate investment – but it may change course in order to have greater flexibility.
“You can have the rigidity of silos such as digital infrastructure, renewable energy and that sort of thing,” O’Sullivan remarked. “But, having already had some preliminary conversations with some very big pension plans and sovereign wealth funds, we think there may be scope to have something more akin to a climate tactical opportunities fund.”
According to Wilder, in order to drive large-scale investment into transformative infrastructure it’s very important to have a much more holistic approach. “This is why we brought a group of very skilled individuals from across the following areas: law, public policy and corporate finance and investment, with engineers to be added over time as well,” he said.
Other members currently rounding out the Pollination team, include chair Rob Jesudason, former chief financial officer of Commonwealth Bank of Australia; and senior partner Patrick Suckling, who was most recently Australian Ambassador for the Environment.
The firm has also attracted some leading finance experts as senior advisors. They include: Christof Kutscher, global chair of AXA Investment Managers; Sam Mostyn, chair of Citi Australia; and James Cameron former founder of green merchant bank Climate Capital and former member of the UK Prime Minister’s Business Advisory Group.
Pollination currently has offices in London, Sydney and New York.