GEF Capital, a private equity manager focused on solutions companies, is looking closely at the critical minerals theme. With long-term relationships with multilateral funds and European development banks, the investment house understands that the thesis has become not only climate-related, but also geopolitical.
“The issue of critical minerals also comes from the aspect of searching for more resilient chains, mainly in view of the instability with China, Russia and the United States”, says the director of value creation and sustainability at GEF Capital in Latin America, Fabiana Goulart. “Many investors come to us precisely because they are from large European development banks looking for close ties.”
Also read:
Study abroad
Upgrade your career!
Critical minerals (or rare earths) are fundamental components for the development of batteries, electronics and even military equipment. Brazil has the second largest reserves of these minerals, with around 21 million tons, which corresponds to 23% of world reserves.
In particular, their use in batteries makes minerals critical in an important industry for the energy transition: “We are not just looking at the issue of production or efficiency. More important than that is recycling, the circular economy. It is like electronic waste, it is possible to capture and use many metals”, says the director of GEF Capital in Latin America, Estevan Taguchi.
Also read:
Continues after advertising
The manager currently has a fund in the divestment period and another that is available to enter one or two companies. The portfolio includes companies in the battery production, renewable energy, recycling and agribusiness solutions segments.
For the home, the high demand for energy in data centers also strengthened the energy efficiency theme. “If artificial intelligence took the consumption of generated energy to between 6% and 7%, this should still evolve to 10%. So, we are looking at some derivatives, such as air conditioning and substation. These are very recent trends”, points out Taguchi.
Also read:
He assesses that attracting Brazilian investors is often difficult due to competition with attractive returns from fixed income, in addition to a small appetite for the sustainability mandate. “On the other hand, the appetite has been very high with multilateral funds. They are our main investors”, says Taguchi.
In its Brazilian operation, the company recently became the first in the country to receive investments from the Green Climate Fund (CGF), created in 2010 by the countries party to the United Nations Framework Convention on Climate Change.
CGF entered as an anchor investor in the vehicle still being structured by GEF. The manager was also the first, and so far only, to receive the European Investment Fund in Brazil. In addition to the office in Brazil, GEF also operates in the United States and India. Globally, the company has US$3 billion under management worldwide. In Brazil, the value is approximately US$400 million (or R$2 billion).
Continues after advertising
