CASE STUDY 12
Opening all the doors: optimising assess to diversified conservation finance through hybrid corporate structures
Context: A 2014 study by McKinsey & Company, Credit Suisse and the World Wildlife Fund - ‘Conservation Finance: Moving Beyond Donor Funding Towards an Investment Driven Approach’, has suggested that mainstream public and philanthropic funding for conservation needs to be increased by 20 to 30 times annually if current conservation demand is to be met. This is a $100+ billion deficit that will only ever be closed by developing new ways for investment capital to work alongside traditional donor sources – a dynamic that is directly serviced by Conservation Capital’s enterprise driven approach.
Our role: We have played a lead role in the serial development of ‘hybrid’ corporate structures for conservation where both for-profit and not-for-profit legal entities are combined within a single group structure. Examples include the creation of the first investment funds for conservation enterprise in Africa (African Wildlife Capital) and Europe (Rewilding Europe Capital) as subsidiaries of the international NGOs African Wildlife Foundation and Rewilding Europe, and both the Ol Pejeta and Borana conservancies in Kenya whereby for-profit operating companies are owned by not-for-profit holding companies.
Outcomes: Two important outcomes have been enabled by this approach. Firstly, tens of millions of dollars of new investment capital have been released into the for-profit components within these structures (to fund commercial enterprise components) alongside the donor funds that continue to be raised by the not-for-profit holding vehicles. Secondly, profits within these subsidiaries are being released as dividends into the holding companies where they serve to offset overheads and enable these donor funded components to both optimise their financial efficiency and thereby enhance their attractiveness to donor markets – a significant compounding benefit.