Family office of the year: Wermuth Asset Management

Channels: IMPACT

Companies: Wermuth Asset Management, ERAFP, AP4

People: Jochen Wermuth, Philippe Defosses, Mats Andersen

German family office and investment advisory firm Wermuth Asset Management had a landmark year, which saw it launch a climate endowment designed to drive a "green revolution".

The endowment, launched in June 2019 in partnership with Munich-based multi-family office AQAL, will attempt to replicate the model for portfolio allocation and investments used by Ivy League university endowments in the US. In particular, it will use alternative assets, such as infrastructure, real estate, and private equity.

It will target investment from large European pension funds and insurance companies.

At the time, Jochen Wermuth, principal of Wermuth Asset Management, said the endowment could eventually grow to as large as €40 billion ($45 billion) in assets under management over the next 30 years.

A statement published at the launch said the endowment will invest in the "champions of the Green Industrial Revolution," and in particular those that support solar photovoltaic technology, the electrification of public transportation and commercial-scale solar roof programs. It will invest directly at the early stages of project development.

Wermuth said at the time: "I believe there has never been a better time than now for the investment community to step forward and initiate this change." He said there was "a clear demand for a green revolution", indicated by the success of politicians campaigning on a green agenda in the 2019 EU elections, as well as the popularity of the 'Fridays for Future' climate protests.

Wermuth is co-CEO of the endowment. Philippe Defosses, former CEO of French pension fund ERAFP, is co-CEO and global CIO. Senior advisors to the endowment include Mats Andersson, former CEO of Swedish pension fund AP4.

The first product will be the 'Climate Endowment Hydropower Fund', an open-ended Luxembourg RAIF, expected to be launched in the second half of 2020. The fund aims to achieve 8% IRR through investments in green- and brown-field mid-sized run-of-river hydropower plants. "Run-of-river" implies that there is far less negative environmental impact than for larger hydropower plants that close off whole valleys with large barrages, Wermuth AM said.

Single family office Wermuth AM describes itself as a climate impact investment adviser. It also manages a range of Green Growth Funds.

Wermuth is also advocating for greater investor action to drive positive impact in his role on the steering committee of the 100% Impact family office network – a subgroup of impact investing initiative Toniic, within which members commit to pursuing positive net impact across all of their investable assets.