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Mark Shorrock

Few entrepreneurs will be able to claim such an unusual motive for setting up their business as Mark Shorrock, founder and chief executive of the low-carbon accelerator fund. He says: “I had Michael Douglas and Catherine Zeta-Jones wanting to do a movie that I owned – and I was not excited.”

Before moving into the world of environmental venture capitalism, Shorrock worked as a film producer but he says this had lost its appeal.

He says: “What I was excited about was the various climate change movie scenarios I had been investigating and all the books on climate change I had been reading so I thought this was silly, I shouldn’t be making films any more.”

After an interesting and varied career path, Shorrock decided to set up the fund as he says there seemed to be a gap in the market. “I recognised there was not a fund dedicated to here-and-now solutions to climate change. I saw a need and that no one else was catering to that need.”

After three years of planning, Shorrock launched the fund in 2006 and it was the first Aim-listed closed-ended fund to focus on the low carbon sector. Since then, the fund has raised £44.5m, which it is investing in new businesses which involved in clean energy production, cleaner fuel technology, energy efficiency and new building technology.

The fund’s investment strategy is to take a significant but minority stake in the companies it invests in and through their growth aim to return 30 per cent on an initial rate of return to investors over three to five years.

Shorrock says he has always been interested in the environment. “I grew up in Tavistock, Devon, with the sea and nature. When you see man trashing stuff, it seems wrong.”

But his route into eco-investing has been anything but direct.

After studying Chinese and Spanish at Leeds University, he worked as a journalist in Asia, a tour guide and expedition leader in Patagonia followed by a stint as a BBC researcher before movie making and wind farm development and finally settling on his current business. But his passion for environment protection has been a constant and has often motivated his various career changes.

“After uni, I went to Taiwan and worked for a trade magazine but I found the area too polluted and I did not want to live there any more. So I went to Argentina and worked on the Buenos Aires Herald, the English newspaper out there. Two things happened. I reviewed a book on the marine wildlife of Argentina, and I worked out that it all lived in Southern Patagonia.”

Obviously, there was no alternative but to move there and this led to his next two roles.

“I was studying killer whale movements and taking tourists out to see the wildlife. It was there that I became fascinated by the history of the Welsh who had emigrated to Patagonia in 1865.”

A group of Welsh settlers had fled poverty in Wales in search of arable lands but found limited farmable resources so were forced to venture deep into Patagonia to make a new settlement. Totally intrigued with these Welsh adventurers Shorrock “decided to re-enact horseback expedition that the Welsh had done to the Andes to find new land. I rode from the Atlantic ocean to the Andes and one thing led to another and it ended up being a five-part TV series.”

After that, he worked for the BBC in China and then moved on to the movie industry working for Fox and Warner.

He says: “Around that time, at a dinner party one evening, I heard about the largest wind film company to be built in the Outer Hebrides. I liked Scotland, I’d worked there before and I thought wind farms were the number one here-and-now solution to climate change. So I thought I would set up a wind farm development company.”

Within a year and half of its inception, the business had made the original shareholders 13.5 times their money and had a portfolio the same size as Scottish and Southern and Scottish Power.

Although you could be forgiven for thinking that Shorrock’s decision making seems rather whimsical, he says hard work and research is key and that his fund has been no exception. “Our share price has dipped over the last three weeks, caught up in all this credit crunch stuff. You can see from this that the market does not always recognise the value and the fast growth inherent in environmental technologies. And it really is not easy to raise the money. We did 87 meetings to raise the original sum.”

As for where to invest the money, Shorrock says: “For me, the only way to invest is hands-on with people who you are giving money to. It has got to be a judgement call on the people one by one. Engagement works. By being engaged, you can make good judgement calls for your investors because you understand the company and the drivers.”

As more funds jump on the bandwagon offering varying degrees of environmental and ethical investments, Shorrock says it is important to discern the lighter green screening approach from funds like his which are genuinely engaged with sustainable development.

“Clearly, we need to differentiate ourselves by saying we are a fast-growing environmental business that is strong in terms of returns on capital but also strong in terms of the fact our investments do not pollute the planet. Our criteria is based on good management, technology that is top three in the world and market demand. The investments we make are within five years of being start-ups, they are very much new and conscious businesses.”

The fund does not include fuel cells, hydrogen economy or automobile stuff because he says you can’t tell the timescales. “We don’t want to take money from investors and then find out seven years later they have not made a return.”

Another thing they will not invest in is biofuels that are competitive with other crops. But Shorrock tips algae as the new source of biofuel.

This year, global reach is very much part of his inexhaustible ambition. “We hope to raise more funds now and in the coming months open an office in Asia. Brazil, South Africa and Mexico all have some exciting things going on and we would like to get involved.”

Born: Tavistock, Devon

Lives: Erlestoke, Wiltshire

Education: Tavistock School, Leeds University

Career: Film Producer, founder Ultimate Pictures 1998-2001, founder and CEO Wind Energy Ltd 2002-2004, founder CEO Low Carbon Investors 2005 to present

Likes: Anything to do with environmental technologies, books with environmental solutions and examples of what works, wetlands and coastlines, cricket, football, France and Italy, travel by train, hanging out at home

Dislikes: Airports, antiquated thinking around infrastructure and energy, pessimism

Drives: Volvo C70

Book: Miss Smilla’s Feeling for Snow

Film: Last Samurai

Album: Zao Chuan (Taiwanese artist)

Career ambition: Achieve 50 per cent reduction in C02 levels worldwide

Life ambition: Lead the creation of a sustainable economy

If I wasn’t doing this, I would be… CEO of an eco cleaning products or would set up a chain of city eco hotels

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Dear Mr. Shorrock,

    I red that you are involved with renewable energy opportunities in Spanish and I thought the following offer could be interested for the portfolio`s Solar Opportunities.

    SOLAR FARM

    – 2,5 MW solar Photovoltaic plant in Valladolid / Spain

    – It is divided in 25 limited companies of 100 kW each

    – TRINA module (fixed structure)

    – SMA Inverter

    – The plant is 100% operational. Tarifa Q1 2009, at 0,32 euros/w

    – 80% Finance and 20% equity

    – 12% TIR aprox leveraged and 8% aprox. with no leveraged.

    – Full plant sales price: 4,85 €/w pick

    If you see this plant as an interesting opportunity for ,Solar Opportunities please contact me and I could give you all the information you could require.

    Waiting for your news receive my best regards,

    Ignacio Jiménez

    Madrid

    M +34 679 181 793
    ijimenez@dinfca.com

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