Institutional-backed firm focuses on biodiversity net gain and nutrient neutrality solutions
Wild Capital, which specialises in providing biodiversity net gain (BNG) and nutrient neutrality (NN) solutions to developers, has closed its first fund and launched an innovative options product, React News can reveal.
Through the Wild Capital Fund I – which closed earlier this year – the group is acquiring strategic habitat banks across the UK to cater for the BNG and NN markets. The debut fund is backed by Nyera, an offshoot of global commodity trader Gunvor, which focuses on the renewable and sustainable investments. Wild Capital’s strategy is to own all its schemes, rather than leasing.
“We are well positioned to provide significant offset liquidity to accelerate nature recovery”
BENJAMIN PERRY, WILD CAPITAL
The Wild Capital team has previously worked across policy for BNG and NN in Natural England, delivered more than £600m in residential and commercial development, and has managed more than £2bn in assets. The firm’s chairman, Roderick Gibbs, is co-founder and managing director of Value Retail Group.
Launch of options product
Wild Capital has also rolled out a BNG options product, allowing developers to hedge against future pricing and availability risks as they work through planning processes. Once the option is called, Wild Capital has an obligation to deliver the offset units to the pre-agreed terms set out in the supply contracts.
This gives developers flexibility to call supply at the time best suited to them, making efficient use of capital rather than committing to BNG offset units or fixed payment terms with suppliers early in a development. Un-exercised options can be traded on, Wild Capital noted.
Benjamin Perry, partner at Wild Capital, said: “We are well positioned to provide significant offset liquidity to accelerate nature recovery and ensure sustainable development proceeds without delay. We have been extremely encouraged by the early take-up of our BNG Option product. It’s proven to be a good fit for developers looking for high-integrity offsets at terms that better match their cash flows.’’
Wild Capital is already pricing option agreements with a combined value of £27m for developers across various sectors, including logistics, house building, build-to-rent (BTR) and major mixed schemes.
Navigating BNG and NN
The BNG and NN markets are estimated to be worth in excess of £300m per year. Nyera’s parent Gunvor has a $150bn turnover, providing Wild Capital with sufficient liquidity to underwrite the market opportunity.
Fredrik Tornqvist, energy transition director at Nyera, said: “We have made a significant investment in Wild Capital to enable it to execute its business plan that will have a transformative impact on UK nature and biodiversity. Our investment in Wild Capital is part of a wider corporate strategy to invest in global energy transition and the global biodiversity markets.”
BNG regulations, approved in the 2021 Environment Act and due to come into force in January, demand that all new major developments provide a 10% increase in biodiversity compared with what was on the site before.
“We have made a significant investment in Wild Capital to enable it to execute its business plan”
FREDRIK TORNQVIST, NYERA
Where BNG applies, the required gain can be achieved in one of three ways: by carrying out the relevant habitat creation or enhancement works on the development site itself (ie onsite); by creating or enhancing habitat on an offsite location (such as those being offered by Wild Capital); or by buying statutory credits.
Many developers are unable to mitigate onsite, meaning they will rely on offset units from the private market or government-backed statutory credits to make up the shortfall.
The government has stated the credits will be deliberately priced unattractive to ensure they are used as an option of last resort, while private offset unit pricing varies significantly by planning authority and by habitat type with no supply in many authorities.