NAV Collaborates with Client to Break New Ground for Funds Investing in Carbon Credits
Client
Bellus Ventures
Background
In 2017, Bellus Ventures pioneered carbon credits as an asset class by launching the first fund investing in California Low Carbon Fuel Standard (LCFS) credits. Founder Zachary Singer convinced investors that state carbon markets could perform even under a federal government that was rolling back environmental regulations. The Bellus LCFS fund raised $29 million and returned 1.8x net within two years.NAV Fund Administration has been a trusted partner of Bellus since its inception, setting standards and best practices for fund administration for this new asset class. Bellus Vice President Ben Lewittes and Co-Portfolio Manager Brian McKibbin share their experience with NAV.
How NAV Helped
Handling Carbon Credits
Challenge
Performing fund administration and reporting for an entirely new asset type required unique processes and innovation.
Solution
NAV broke new ground in fund administration for funds investing or trading in carbon credits. NAV's experienced account managers researched the product extensively before offering services to clients and Bellus has been exceedingly happy with NAV’s reporting methodology and performance handling reporting for this new and unique product.
Outcome
“NAV has done an incredible job with the specialized settlement procedures of carbon credit trading,” Lewittes said. “NAV has handled bilateral trades, deals involving physical commodities, carbon credit auctions, and reconciliation with government-run credit registries. NAV has always risen to the challenge.”
Complex Operations
Challenge
The in-house Bellus team needed additional support to handle the volume of detailed functions involved in administering a fund investing in carbon credits.
Solution
Niche products like carbon credits often involve complex operational adjustments. The fund does not operate like a regular trading fund, but participates in auctions, OTC deals, and other unique activities that require the administration team to fully understand fund operations. NAV has been able to assist Bellus with these specialized functions, significantly reducing its in-house team's operational burden.
Outcome
“The administrative component of our business is complex and comes with challenges. NAV does a great job of operational management and making everything as seamless as possible both for us and for our investors,” McKibbin said. “We wouldn’t have been able to accomplish what we have without this partnership. NAV has been an incredible administrator and we could not ask for more.”
Prospective Investor Due Diligence
Challenge
A variety of investor types required precise and diverse due diligence processes and authentication.
Solution
NAV assists Bellus in prospective client meetings and independent administration verification, which supports their fundraising efforts.
Outcome
To date, Bellus has raised more than $500 million for its carbon funds. Investors include endowments, foundations, institutional investors, fund of funds, family offices, and high-net-worth individuals with NAV performing all necessary due diligence on each of these varied investor types.
