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Climate Change Capital Faces Takeover

19 December, 2011

Climate Change Capital, a London-based low carbon investment firm, is on the verge of becoming one of the most high profile victims of the crash in global carbon prices as it prepares to be taken over by New York-listed Bunge, one of the world’s biggest agricultural commodity traders.

James Cameron, the investment firm’s founder and a member of the UK government’s Business Advisory Group, is expected to stay on at the firm he started nearly eight years ago, according to people familiar with the matter.

Climate Change Capital had one of the largest privately held carbon funds five years ago and is still a leading investor in environmental ventures.

But economic volatility in Europe, home of the world’s largest carbon market, has seen prices for the allowances traded on such markets plunge to record lows this year, while economic weakness in Europe and the US has sapped investor interest in some low carbon businesses.

Climate Change Capital, which manages about $1.5bn worth of funds, has suffered heavy losses.

Bunge, which has more than 32,000 employees in more than 32 countries, is believed to be close to sealing a deal that would acquire Climate Change Capital at a price that one person close to the proposed transaction said was “significantly below” the £100m the firm was valued at nearly three years ago.

The commodities group, which is headquartered in New York, has been involved in the carbon emissions trading market for years. It was drawn to the planned acquisition by the extensive knowledge of the carbon markets of the Climate Change Capital’s staff, according to people familiar with the matter.

Mr Cameron, a specialist in international law, was involved in the negotiations that produced the 1997 Kyoto protocol, the climate treaty that gave birth to the UN-backed carbon offset market, the second largest carbon market after the European Union’s emissions trading system.

An announcement on the Bunge transaction is expected shortly, with the exact timing depending on the final approval by the UK’s Financial Services Authority.

Climate Change Capital has been advised by the European financial advisory firm Ondra Partners. Both declined to comment on Sunday and Bunge had not responded at the time of writing.

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Climate Change Capital Faces Takeover

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