December, 2019
Terra Alpha Investments – 5 years old and just getting started
Our firm legally came into being on December 4, 2014. Terra Alpha was founded by Andrew Geller and Tim Dunn, two highly-experienced investment professionals, in order to provide a better way to invest in public equities. Our investment thesis was simple but powerful: build a rigorous investment process to incorporate material environmental information and data into a traditional fundamental research process to identify companies that are best prepared to thrive in our rapidly-changing world. Our contention was, and remains, that this approach will improve long-term outcomes for investors, the environment, and the world.
We chose the name Terra Alpha Investments to send a clear message that we saw a tremendous opportunity for investors in placing the value of our planet’s natural resources and the society that demands a sustainable future at the core of our decision making. We coined the term Environmental Productivity (EP) to define our approach to measuring a company’s use and impact on essential natural resources (e.g., clean air and water; healthy soils, forests, and oceans; and raw materials).
Our first major step in building the firm was to recruit Dan Sanborn to our team to help design and lead the process of incorporating the growing environmental datasets into our hybrid investment process. Dan leads our firm’s research team and manages the quantitative components of our research and portfolio analytics. Amy Dine joined two months later to spearhead our work in engaging with companies and advocating to the investment community to incorporate Environmental Productivity into decision-making. Today, our firm’s investment analysts directly engage with portfolio companies to improve both EP practices and disclosure with Amy’s guidance.
Our core investment strategy, which invests in mid-to-large capitalization global public equities, launched on May 1, 2015. Over the subsequent four and a half years, the strategy has delivered superior financial and environmental returns. Our strategy is made available to investors via two Limited Partnership funds managed by Terra Alpha Investments. (Accredited investors or fiduciaries are invited to request more specific information on our investment products and their returns.)
Along the way we have built our investment team and our investment process to deepen our knowledge of companies and continue to incorporate the most material information and data sets available. We have a five-person research team, which boasts over 40 years of investment experience. We have assembled an Advisory Board made up of scientists, academics, investors, policy experts, and researchers.
To assure our investment process is rigorous, repeatable, and scalable, we built a number of innovative research structures. To fully assess how prepared any company is to manage the risks and opportunities they will confront on our changing planet, we have developed an Environmental Productivity ratings system. To help us determine how likely a company is to thrive over the forward-looking 5+ years, we strengthened our fundamental research process by constructing our Enduring Business Model (EBM) framework. The combination of our EP ratings and EBM scores helps us identify companies we want to own, at a reasonable valuation.
Over our first five years, we have been recognized by third-parties for our investment and impact work. The UN Principles for Responsible Investment has given Terra Alpha an A+ rating for our strategy and governance. Real Impact Tracker has ranked our firm amongst the top decile of investment managers. We have also been invited to speak on panels on our investment approach at events and at business schools across the US and in the UK. These include: Ethical Corporation’s Responsible Business Summits in NYC and London, CDP Workshops in San Francisco and NYC, Confluence Philanthropy’s meetings, Duke University, University of Virginia, The College of William & Mary, Brown University, C2ES, World Resources Institute, and the CFA Societies in Washington, DC and New York City.
Along the way, we have institutionalized the operational aspects of our firm in order to assure that we can serve the needs of investors from accredited individuals to large institutions. In late 2018, we began to assemble a strong team to lead our business development program. Tara Doyle heads the team, supported by Katie Bovard. This year we moved our office into Washington, D.C.. Since our founding, we have been fortunate to attract investors from across the country, including HNW individuals, foundations, family offices, and endowments.
We are also committed to managing our firm in a manner that we feel companies should manage theirs. We are an employee and investor-owned company. We have a diverse team and advisory board. We provide our team with a strong work-life balance environment and comprehensive benefits. We work to minimize the environmental footprint of our office, employee commuting, and work travel. As members of 1% for the Planet, we support organizations that align with our work. We provide a high level of transparency to our investors as we work to serve their long-term investment needs.
As we enter our sixth year as a firm, we are focused on continuing to provide superior financial results, alongside much lower environmental impact, for our investors. We are prepared to grow our firm to serve many more investors and have a much larger positive impact on our planet’s environment and our society.
We truly appreciate all those who have invested alongside us and/or supported our firm in these first years.
— The Terra Alpha Investments team