Mission Markets Spring 2013 Newsletter

 

 

 

 

Spring 2013

 

 

 

 

 

 

Leading Sustainable Capital Markets

 

 

 

 

Check out our new look!

Mission Markets recently unveiled its new website.  Please tell us what you think at missionmarkets.com.

 

Our Spring newsletter is chock-full of new happenings at both Mission Markets and within the sustainable investment community.

Inside you’ll find:

  • Recent Additions to the MM Team
  • ?Recent and Upcoming Mission Markets Events
  • Featured Platform Opportunities
  • New Member Spotlight

Please forward this newsletter to anyone who you think may be interested in the Impact Investing and sustainability space.

Welcome our new additions to the team

Mission Markets is honored to have these executives call Mission Markets home.

 

Ken Marienau, Chief Executive Officer

Ken comes to Mission Markets from Bendigo Partners, an investment group composed of ex-E-Trade executives.  Ken worked as VP of Finance at E-Trade during their extreme growth phase and as a senior executive at Eastman Kodak.

 

Dawn Edwards, Senior Managing Director Institutional Investor Services

Dawn brings 20 years of institutional capital markets experience to Mission Markets. Previously, Dawn co-founded AltruShare Securities, LLC, the first institutional brokerage firm specializing in community investment.

David Bernat, Director MMX Market Operations

Dave has worked at some of the nation’s largest and most noteworthy investment banks including serving as a Director on the Public Finance Group at Bank of America Securities LLC, and in various roles at KPMG, Merrill Lynch and Prudential.

 

Roger Frank, Senior Managing Director, Developing Markets

Before founding Innovare Advisors in 2009 to deploy capital into multiple impact sectors in emerging markets, Roger worked to facilitate some of the world’s first capital transactions for microfinance at both Developing World Markets (DWM) and Blue Orchard Microfinance Securitization (BOMSI).

Michael Shuman, Director Community Portals

Michael is an economist, attorney, author, and entrepreneur.  He’s also a Fellow of three organizations:  Business Alliance for Local Living Economies (BALLE), Cutting Edge Capital, and Post-Carbon Institute.  He has authored, coauthored, or edited eight books on local capital preservation.

 

Recent Events

 

Social Innovation Forum, Beijing, China

Mission Markets joined Wayne Silby and Dan Sheehy last December at the Social Innovation Forum hosted by 21st Century Media, in Beijing, China, which brought together global leaders dedicated to finding creative solutions to social problems.  Mike Van Patten delivered a keynote address and Dawn Edwards served on a panel discussing the potential for collaborative capital models.

Linking Small Smallholder Farmers to Markets, San Francisco Federal Reserve 

In February, Mission Markets co-sponsored a roundtable discussion at the San Francisco Federal Reserve Bank to discuss connecting small farms with larger markets as an economic development tool.  We explored existing examples from Africa, necessary infrastructure to access local and global supply chains, and the financing needed as it compares with newly minted initiatives in California.

 

Water Independencies, World Water Day, Prana Sustainable Water 

Mike Van Patten was a featured presenter on March 22nd, World Water Day, at “Water Independencies,” hosted by the Prana Sustainable Water Exchange to discuss market solutions to global water procurement security issues.

Upcoming Event:

Mike will be speaking at the TBLI (Triple Bottom Line Investing) Conference in New York on June. Also known as ESG (Environment, Social and Governance), the conference is the world’s largest independent global learning and networking event on ESG and Impact Investing.

 

Featured Opportunities

 

Mission Markets is proud to host the following impact members:

 

  

   

 

 

 

Member Spotlight

 

Our Spring issue features a Q&A with Roberts and Rose Mariculture Corp.  With operations in Busuanga, Phillipines, Tom Roberts and Robert Rose are a perfect example of the emerging class of impact oriented entrepreneurs.  Sustainability minded, socially conscious, and a community-first attitude lay the foundation for a healthy for-profit business model.  Due to space constraints, what follows is an abbreviated interview .  Please read the full interview at our blog.

 

Q) What is Mariculture? What inspired you to enter this market and what are some of your past accomplishments?

 

A) Mariculture (mari =sea in Latin) is the science or art of sea farming of plants and animals. The word is used interchangeably with aquaculture, which includes both marine and sea farming or cultivation.

 

Inspiration was an evolution over time for both of us, from sport/recreational diving youths to either a commercial marine archeologist/pearl farmer/business entrepreneur (Tom Roberts) or a qualified marine biologist/commercial aquaculturist (Robert Rose, PhD). Independently, Tom through observations and working underwater on pearl farms and Bob’s research/aquaculture on the reproductive ecology/life cycles of pearl oysters and sea cucumbers discovered both species share the same marine habitat and thrive together in open-sea, polyculture systems. 

 

Both of us were aware through colleagues from the seafood industry and scientific literature that an ever-increasing global demand for sea cucumber was due to a rapidly growing human population in combination with a plethora of collapsing regional fisheries. Readily available buyers in close proximity to major markets across the South China Sea, made the practicality of entering market with aquacultured produce cost-effective; hence, our partnership commenced.

 

Q) What is a sea cucumber and how does this product fit your expertise?

 

A) Sea cucumbers are marine invertebrates belonging to a large diverse, primitive marine group or phylum called Echinodermata that inhabit the ocean’s shallow-to-deep seafloor sediments. There are over 1,100 species of sea cucumbers belonging to the class Holothuroidea (Greek meaning “holos”: whole and “thurios”: rushing), which are part of a diverse marine phylum or group of marine organisms called Echinodermata (Greek meaning spiny skinned). These worm-like animals are related to sea urchins, sea stars and brittle stars but with their skeletons reduced to microscopic ossicles or calcareous spicules embedded in a collagen-protein body. Sea cucumbers can be long and thin (up to five meters) like a snake or short, thick oval-shaped (20-40cm or one foot+) like a loaf of bread. They are mostly omnivorous, detrital feeders that burrow and graze on the seafloor.

 

Our expertise rests in understanding sea cucumber ecology (who eats whom), developmental biology (life cycle) and their husbandry. We have the biotechniques to routinely fatten broodstock to spawning healthy eggs, rear large quantities of larvae and juveniles, and sea ranch (growout) the sub-adults to a harvestable size cost-effectively and renewably. Equally, important we have developed and/or experience with the hygienic biotechnology required to produce premium seafood.

 

Q) Please give us a broad overview of the sea cucumber market.

 

A) Sea cucumbers (or trepang as commonly referred to in the Indo-Pacific Region) have been collected as food from the South Asia and Indian subcontinent for more than a thousand years and traded with the Chinese. The sea cucumber fishery is based on 52 species found in sub-tropical and tropical waters that belong to the Holothuroidae and Stichopodidae families. They are collected for meat, which when processed and dried is traded as beche-de-mer.

 

The three major, contemporary beche-de-mer trade markets today are Hong Kong SAR (China), Singapore, and Taiwan; these centers also involved in a well-established global network that re-exports sea cucumber products (eg, to Japan and Korea). The majority of trade figures originate from these centers. 

 

FAO catch and trade statistics available April 2011, indicate the two most productive sea cucumber regions are Asia and the Pacific with and estimated combined harvestable catches ranging from 20,000 to 40,000 tonne per year.

 

The price per unit of dried meat varies according to quality and size of the product. The price of dried meat for two species to be farmed at the Philippine farm for their nutraceutical/pharmaceutical properties ranges between $80 and $95 per kilogram (the raw powder product per kg can be $300 plus depending on the purity). The price of dried meat for the two food species ranges between $130 and $280 per kilogram.

 

Q) How is the meat used as a medical product and what does this market look like?

 

A) The nutritional profile of sea cucumbers makes it an ideal tonic and health food. The meat and entrails are high in essential amino acid proteins, vitamins, trace elements, and in fatty acids. Thus, the demand for sea cucumber products in traditional Chinese medicine continues to remain strong. They are not only valued for their antifungal and antibacterial properties but also as an aphrodisiac and cure for osteoarthritis, some lung cancers, whooping cough, gastric ulcers and high blood pressure. 

 

Tissues of the body wall are composed of insoluble collagen (a gelatinous substance found in the meat) similar to soft-shell turtle and deer-horn collagen making it suitable for treating anaemia and as a nutrient supplement for haematogenesis. With high levels in two essential amino acids (lysine and arginine) and one non-essential (tryptophan), makes the gelatin in sea cucumber more valuable than other gelatins.

 

Pharmaceutical companies recognize the importance of two mucopolysaccharides, holothurian glucosaminoglycan (HG) and fucan (HF), found in the body wall tissues as compounds that can be used in drugs to inhibit some cancers, such as, lung and galactophore cancers, enhance the immune system and reduce blood clotting. Since the 1990s, sea cucumbers have been used as a source of chondroitin sulphate (‘sea chondroitin’) to produce anti-inflammatory drugs for osteoarthritis, rheumatoid arthritis and ankylosing spondylitis. Collagen is being used to help produce artificial skin. In Japan, there is a patent for sea cucumber chondroitin sulphate in HIV therapy. 

 

Western medical industry has begun to appreciate through scientific verification that sea cucumbers belonging to the Holothuroidea class have an impressive profile of valuable nutrients and a number of unique pharmacological compounds with therapeutic properties and medicinal benefits. In recent decades, the medicinal properties of sea cucumbers have gained enormous popularity. Further, sea cucumbers by the nutraceutical industry as a valuable food source with physiological benefits for human health is becoming increasing apparent. In summary, given the predicted increase in size of the global middle class to reach approximately 5 billion people by 2030, the demand for sea-cucumber-derived medicines should remain buoyant.

 

Q) Why did you choose the Philippines? How do you incorporate local Filipino cultural values into your business practices?

 

A) The location of the project is ideal environmentally, logistically and socially. The eco-system in the Busuanga archipelago is a biodiverse community with large expanses of seagrass and seaweed, mangrove intertidal shores that are protected from rough seas. The meadows are natural, shallow water nurseries for sea cucumber juveniles which extend subtidally into gentle, sloping seafloors, littered with coral outcroppings to form large-basin channels with soft mud/sand sediments rich in interstitial flora and fauna that create natural paddocks for adult sea cucumbers. 

 

Although the area is on the southern boundary of the cyclone/hurricane corridor for the Philippines, the monsoonal weather generated is not generally destructive, acting as a “nutrient pump” to pervasively replenish the marine environment with organic and inorganic particulates essential for primary plant production (that underpins a vibrant eco-system). The archipelago’s reefs are well preserved due to the custodial efforts of the tourist diving industry, pearling companies and local/federal government marine park reserves and no-take 

 

The proximity to major markets of Hong Kong, Singapore and Taiwan is fortuitous. Locally the businesses surrounding the farm site are environmentally low-impact (eg tourism, pearl farming, village-scale farming, fishing and light industries).

 

The local ethnic groups are all peaceful predominantly Christian with Muslim and indigenous minorities. Villages nearest to the site have many families that use to work on Tom Roberts pearl farm and are experienced mariners keen to become involved in the venture. The project will blend seamlessly into the pre-existing, subsistent sea-cucumber trading activities of the area providing employment and business opportunities related to all marine seafoods produced in the area.

 

Q) What sort of legacy do you hope to foster through this venture?

 

A) The venture illustrates that ethical and sustainable aquaculture profitably produces premium seafoods, and important medicines and health foods for future mankind without having to “mine” the sea and exhaust all its treasures.

 

Q) Any closing thoughts?

 

A) Investors interested in the Mariculture industry must appreciate a number of concepts:

 

1. The farming/propagation/marketing of seafood and medicinal products are and will be renewable, and underpinned on evidence-based science and biotechnology.

 

2. All production plans are founded on ecological principles and established reproduction models for each organism farmed.

 

3. Our research motto is to innovate, adapt and adopt.

 

4. Production is not linear but geometric.

 

5. Expansion is measured and step-continuous.

 

6. Profits/ecological sustainability/cultural satisfaction must be balanced, and achieved honestly and fairly.

 

7. “80/20” principle is modified to imply: to produce a renewable product, 80% of the effort must emanate from nature with only 20% derived from human blood, sweat and tears.

 

 

Mission Markets is live and open for business!  If you are an accredited investor interested in impact investment opportunities or a social or environmental enterprise raising capital, please take the time to register at missionmarkets.com.

Please join our upcoming webinars:

 

On April 11th at 2pm EDT, we will be hosting an impact investment webinar featuring the sustainable mariculture industry in Southeast Asia.  If you are an accredited investor please registertoday.

 

This event will kick off our weeklyThursday, 2pm EDT, impact investment series. Other events for accredited investors include:

 

On April 18th, learn aboutcommunity investing, non-profit housing, and the CRA.

 

April 25th will explore the nexus of clean tech, renewable energy, and sustainable agriculture.

 

On May 2nd we’ll look at grain processing and sustainable agriculture.

 

May 9th highlights the new breed of social enterprises and the impact of a one-for-one model.

 

 

Limited time Partner Offer:

 

We are pleased to announce thatLuminisa service of Microrate – the pioneer of microfinance ratings, is offering select fund reports at no cost to Mission Markets accredited investors until April 30, 2013 (retail price of $1,000 each). 

 

The fund reports are available through this offer include: 

• MicroVest Short Duration Fund

• MicroVest+Plus Fund

• MicroVest I Fund.

 

To download these reports, please register on missionmarkets.comas an accredited investor and follow the instructions included in your welcome email.

The headline photo

above was provided courtesy of Eleanor Horowitz, our Vice President of Business Development.  Eleanor is on sabbatical this Spring in Bangalore, India, with the Frontier Market Scouts Program.  You can learn more about the program at the Monterey Institute of International Studies and please follow Eleanor’s adventures online at her blog, Scaling Impact in India.