Investing in carbon and environmental projects and assets could be key to moving the needle forward.
By Real Leaders
Kakariki Capital is on a mission to decarbonize the planet.
The privately owned, Australia-based company invests in carbon and environmental projects and assets — a new, rapidly expanding sector — from early stage pre-development to de-risked. Kakariki’s philosophy and purpose are reflected in its name, which refers to the color green in Maori and is also a parakeet native to New Zealand fighting to survive despite climate change.
Founder and Chief Investment Officer Izzy Jensen applies close to a decade of experience leading research and origination in carbon and environmental markets to guide Kakariki’s investments in environmental solutions aligned with the United Nations Sustainable Development Goals. Core to its investment thesis is that carbon credits are crucial to achieving net-zero targets, and carbon credits make other global challenges bankable, such as biodiversity. Kakariki looks to identify assets that are fundamentally undervalued due to the complex nature of the carbon market.
“While value is our major driver, investing behind our values is our passion,” Jensen says. Thus, Kakariki aims for exposure to reputable project developers, impactful projects for the environment, and projects that improve the lives of stakeholders. The organization manages individual management agreements, the wholesale Kakariki Carbon Fund 1.0, and the Kakariki Land Generation Fund.
Carbon Fund 1.0
Kakariki’s Carbon Fund 1.0 is the first fund of its kind in the Australian market that takes a long-term view of carbon credits and related assets. The wholesale, open-ended Australian unit trust invests in high-quality carbon assets and offsets. While the fund focuses on nature-based projects in the international market, it also invests in Australian and compliance market assets.
One key example, Verity Nature is a significant investment in Kakariki’s inaugural fund. As an integrated carbon project developer operating in Australia and East Africa, Verity Nature not only focuses on carbon emissions reduction, but it also prioritizes positive social, cultural, environmental, and economic impacts within the communities in which it engages. Its projects create employment opportunities, support local communities, and generate wealth through wages, taxes, and business ventures while simultaneously removing carbon emissions and restoring biodiversity.
Land Generation Fund
Kakariki recently launched its own land generation fund to acquire and steward land assets with substantial carbon sequestration potential. By employing innovative practices and technologies, it aims to maximize carbon offset generation while fostering biodiversity conservation.
“This will have a huge impact on restoring cleared and degraded land and enhancing biodiversity,” Jensen says. The fund’s overarching goal is to promote the harmonious coexistence of agricultural and carbon farming with a targeted distribution yield of 6–7% per annum, offering investors the option to generate income from cash, Australian carbon credit units, or other environmental credits with a targeted 12–14% total internal rate of return.
Looking ahead, Jensen says there’s no time to waste when it comes to decarbonizing the planet. “In the imperfect landscape of carbon and environmental markets, perfection is a luxury our climate and planet cannot afford,” Jensen says. “It’s imperative to act now to simultaneously reduce emissions and offset our environmental impact. Let us harness every available tool at our disposal to forge a sustainable path forward for the sake of our planet and the generations to come.”
Recognition for Collaboration
Kakariki earned a 2024 Real Leaders Impact Award for Best Collaboration with Impact Outfit. Impact Outfit, also based in Australia, supports family offices, foundations, and funds to use business and capital for positive impact. It works with clients on strategy and advisory, stakeholder engagement, and experience design and curation. The partnership advanced both companies’ sustainability goals while fostering mutual growth and success.
When Kakariki was a newly established carbon fund, it sought guidance from Impact Outfit to maximize its impact and reach and to create and nurture sustainable relationships with investors and family offices. Leveraging Impact Outfit’s expertise in the impact investment space, the collaboration enabled Kakariki to identify high-impact investment opportunities and build a network of values-aligned potential partners.
“The collaboration was meaningful to us because when Kakariki first started, we didn’t really know what the impact space was,” Jensen says. “We just saw this as a financial opportunity that obviously did good. Then we learned that there was this whole group of investors and this way of thinking about having a positive impact.”
Conversely, Impact Outfit gained experience and exposure through its partnership with Kakariki. By working closely with Jensen, Impact Outfit expanded its portfolio of impactful clients and built expertise in a nascent and important new market. It gained firsthand insights into the complexities of carbon offsetting and sustainable investment, enhancing its ability to advise clients on navigating similar challenges.
