The High Meadows Fund Investments
The High Meadows Fund's mission is important to future generations, as well as our own. The Fund is designed to sustain itself through thoughtful execution of an investment strategy that allows its assets to grow over time.
Our investment strategy has two main components:
Mission impact investments
Our market return, long-term investment portfolio
Our Mission Investments
The High Meadows Fund recognizes the potential for impact by investing the assets of the Fund in enterprises that encourage new farm, food, and forest businesses; land conservation; and building performance improvements that lower the reliance on fossil fuels in Vermont. Generally, High Meadows considers opportunities where the investment or loan is in a pooled fund, rather than in individual enterprises. The one exception is the High Meadows Fund's involvement with the Taproot Capital Fund.
This list reflects current mission investments as of June 2018:
FARMLAND CONSERVATION REVOLVING LOAN FUND, via VERMONT LAND TRUST | 2012 - 2019 | $350,000
When a farm with important features (for example, high quality soils, flood resiliency value to a watershed, visibility in a viewshed) comes on the market, the Vermont Land Trust (VLT) considers purchasing the property and assembling resources from a variety of sources in order to purchase a conservation easement for the property. They then seek an appropriate buyer, often a young farmer with several years’ experience who is ready to take on ownership of a farm. For a variety of reasons, this kind of conservation purchase can take up to two years and requires creativity because of the complexity of funding streams involved. The Conservation Revolving Loan Fund for Farmland helps VLT meet the growing demand for this work, while providing a modest return. Through their Farmland Access Program and with the support of the Conservation Revolving Loan Fund, VLT has worked with 52 new and beginning farmers, and conserved over 7,800 acres of productive agricultural land.
FORESTLAND CONSERVATION REVOLVING LOAN FUND via VERMONT LAND TRUST | 2014 - 2021 | $300,000
This loan allowed the Vermont Land Trust to acquire almost 6,000 acres of intact forestland in the Worcester Range, as part of a plan to conserve a total of 19,000 acres. Acquisition of this property helped the Land Trust:
Secure Federal Forest Legacy funding to permanently protect the property as working forest;
Assure continued, dispersed public recreational access to the property;
Work through the Vermont River Conservancy to engineer public or non-profit ownership of a small section of the property for public access to the river;
Craft and sell a Forest Legacy conservation easement that enables continued sustainable working forest use of the property, while protecting important surface waters, wetlands, and natural communities; and
Sell the conserved forestland to a qualified successor-owner.
EVERGREEN CONSERVATION PARTNERS | 2012 - 2017 | Dissolved in November, 2017
The Castanea Foundation, High Meadows, and the John Merck Fund formed Evergreen Conservation Partners, a Low-Profit Limited Liability Corporation (L3C), with Castanea providing the lead staffing. Evergreen financed the purchase of a former cow dairy farm in Randolph as a first step in establishing a commercial scale goat dairy. Ayers Brook Goat Dairy is helping to build a goat dairy industry in Vermont by operating with open book financials and partnering with specialty cheese producers. Raising dairy goats can provide financial value to farmers while leaving a lighter environmental footprint than conventional cow dairies. In 2017 Ayers Brook Goat Dairy paid back the loan to Evergreen. In November, 2017 Evergreen Conservation Partners was dissolved (see Taproot below).
FLEXIBLE CAPITAL FUND, L3C | 2010 - 2022 | $130,000
The Flexible Capital Fund is an L3C that provides flexible risk capital such as royalty financing or subordinated debt to growing natural resource based companies in a way that enables the owners to maintain control. The Flexible Capital Fund invests in companies that fill a gap or strengthen the supply chain in sustainable agriculture and food systems, forest products, renewable energy, and other natural resource sectors. This page on the Flexible Capital Fund's website has further information about companies in their portfolio.
PUBLIC PURPOSE ENERGY SERVICE COMPANY - Commons Energy | 2013 - 2030 | $250,000 committed
The Public Purpose Energy Services Company concept was initially supported with a 2010 grant from High Meadows and fully developed with grants from the MacArthur Foundation and the Kresge Foundation. In 2014, VEIC created a new L3C organization, Commons Energy, as a wholly owned subsidiary of VEIC. In the fall of 2013 High Meadows made a commitment to provide a third of the capital needed for the first portfolio of projects in Vermont. Several other foundations have made investments in the PPESCO, including the Vermont Community Foundation, the MacArthur Foundation, the Kresge Foundation, and the National Housing Trust. The Commons Energy model combines a full complement of energy services with patient capital to provide a hassle-free approach to deep energy savings in buildings that serve a public purpose: affordable housing, health care, education, and municipal government. The PPESCO differs from a traditional Energy Services Company in several ways: the goal is deeper energy savings, rather than maximum profit; deal transparency; technology neutrality; energy efficiency and renewables are on equal terms; and long-term customer engagement for continuous energy improvement.
TAPROOT CAPITAL FUND | $1,000,000 committed
In 2016, High Meadows and the Castanea Foundation established the Taproot Capital Fund to support projects with patient, risk tolerant capital as a catalyst to stimulate innovative but under-capitalized projects that support the conservation and ecological stewardship of Vermont’s environment and working landscape and the vibrancy of its rural communities. Castanea has developed unique experience in mission investments to strengthen the working landscape. Our partnership enables our joint resources to increase that impact.
VERMONT HOUSING AND CONSERVATION BOARD | 2014 - 2019 | $275,000 committed
This commitment enables the Vermont Housing and Conservation Board (VHCB) to loan funds to affordable housing projects designed to high performance standards and located near village centers. In 2016 VHCB and the Addison County Community Trust used these funds to purchase land for a mobile home park redevelopment in Waltham, within walking distance of downtown Vergennes. This enabled the development of a community of 14 high-performance Vermod homes, each fully powered by solar panels, with battery storage. This is the first “net-zero” affordable housing community in Vermont, and perhaps the U.S. That short-term loan was fully paid back to VHCB and our financing has not been needed since then.
Our Investment Portfolio
Our investment objectives for the entire portfolio, including mission impact investments are as follows:
Over the long term, good investment performance should enhance the ability of the Fund’s assets to finance its mission;
The investments should reflect an emphasis on equity risk, in the interest of generating higher returns over the long term. To mitigate volatility and inflationary risk, the portfolio will also include fixed income and cash equivalents;
Ensure strong financial oversight, financial market understanding and investment opportunities through the engagement of the Vermont Community Foundation’s finance staff, investment committee, and investment consultants;
To the extent practicable, the assets in which the Fund is invested should be consistent with the environmental and economic mission of the Fund; and
We actively seek investment opportunities that further our mission in addition to providing stable financial returns.
Until 2013, the long-term portfolio had relied on diverse, co-mingled equities, and had little say over the underlying investments being made. Two former Environmental Philanthropy Associates, Sarah Brock (now Energy Program Manager at Vital Communities) and Stu Fram (now Senior Associate in Social Enterprise Lending at RSF Social Finance) encouraged High Meadows to align its long-term investment portfolio with its mission. That led to a decision to eliminate oil and gas companies, producers of coal, and utility companies that burn coal as their primary source of fuel (when they can be identified) from our portfolio.
Our investment managers simplified the investment structure by allocating the investments to cash equivalents; domestic bonds; and an actively managed global equity index fund that screens out the oil, gas, and fossil fuel companies. This gives the Fund more control over the companies and industries in which we are invested and helps better align our investments with our mission.