The story behind Terra Alpha’s Environmental Productivity and our journey to create Better Returns, a Better Environment, and a Better World:
Thirty years ago, while I was a very young MBA student, I became fascinated by what made great companies – great. I was drawn to equity investing because it was a profession in which one assessed companies and then invested based on that analysis. In the long-run, the market told you if your analysis about a company was right or wrong. Fortunately, over my investment career my assessments have more often been correct.
During my 27 years as a professional investor, I have learned the power of a deliberate and disciplined investment approach and the importance of a strong, collaborative research team. At Capital Research I was a lead portfolio manager in several of the largest global equity funds with direct responsibility for over $26 billion in client assets. I also oversaw the firm’s global research clusters, which enabled collaboration amongst the firm’s 300 investment professionals.
Unfortunately, over the last 30 years, the public equities markets have become increasingly focused on short-term factors that often have little to do with a company’s long-term reality. And the “markets” increasingly have failed to consider the truly fundamental issues around environmental and societal factors. I walked away from my successful career in professional investing in 2009 because I wanted to try to help correct this market failure.
I spent the subsequent five years working with some of the largest and most important environmental organizations both to learn from them and to help increase the effectiveness of their efforts. My time serving on a state chapter board and working with national leadership at The Nature Conservancy gave me great insights into the power of working positively with companies. My year serving as a Strategic Advisor working directly alongside the leadership team of CDP in London gave me a strong understanding of the growing cache of corporate environmental data and information.
In 2014, I founded Terra Alpha Investments to bring together my deep experience as a professional investor and my strong understanding of the risks (and the opportunities) created by our economy’s impact on essential natural resources that businesses and investors now face. Our firm’s vision is to use the power of our capital markets to help shift how our economy operates so that it is more aligned with our natural systems. To achieve this vision, we invest using our Environmental Productivity approach and we actively engage with businesses and other investment professionals.
Today, Terra Alpha has a team of incredibly dedicated professionals working in support of our firm’s mission. We believe that combining well-considered environmental data and research (our Environmental Productivity approach) with traditional fundamental analysis will allow us to identify some of the most sustainable companies in the world and provide our investors with superior long-term risk-adjusted returns.
Our capital markets can, and must, properly value our natural resources and the manner by which companies serve the needs of society if we are going to shift to a more sustainable economy. Terra Alpha Investments works through our investment fund and our advocacy work to help make that happen. It connects natural and societal factors to the financial investment process in order to provide our investors with a better way to invest their assets.
We work everyday to deliver better financial returns, a better environment, and a better world.
Timothy P. Dunn, CFA – Chief Investment Officer, Managing Member, Founder