From the Spring 2011 Newsletter of the GreenMoney Journal
By Michael Van Patten
My early years heavily influenced my decision to focus my career on growing the impact investing space through the establishment of my current company, Mission Markets. I spent the majority of my teenage years in Ecuador, where my father worked as a diplomat. At this impressionable age, I had the unusual opportunity to experience life in the developing world—Every day I was faced with the extremes of poverty and vast wealth. To this day, I am stunned by the inequalities that exist in the world.
My father used to give me a weekly allowance, and the day after he had given me the money I would come home with empty pockets. I then had to confess that I had given it all away to beggars on the street—it seemed logical, they needed it more than I did. I clearly remember the resulting lectures from my parents: I was foolish to think that I could help these people; I had to block them out, make them invisible to me. I could not at that time and still cannot comprehend that mindset. I continued to give my money away to the same people every day on my way to school. They were anything but invisible to me—my experience in Ecuador stuck with me and has inspired me to change my life for the better.
Mission Markets was born based on these personal experiences, paired with my disillusionment with the traditional capital markets later in life. After returning to the United States and spending 25 years on Wall Street, I became acutely aware of the fact that the traditional single bottom line transactions I was facilitating served no purpose other than making money for myself and enriching people who were already incredibly wealthy. I was putting all of my time and energy into moving money around but accomplishing nothing. My profession was not creating any positive change in the world for those who really needed it. I had to find a career path that would allow me to use my expertise to make a difference.
Microfinance and Carbon were the first markets that caught my eye. To this day, they are the two largest and most developed sectors in the impact investing space. Fascinated by these initial concepts, I began devouring as much reading material on these markets as I could get my hands on. This led me to a number of other verticals—sustainable agriculture, community investment, sustainable fisheries, conservation finance, and many more. These have evolved into the sectors that Mission Markets currently serves.
As I explored the scope of this space I began to realize not only how broad impact investing is, but also how all of the markets, both social and environmental, are interrelated. Unfortunately, the lack of supportive investment infrastructure available to scale these markets causes serious inefficiencies, specifically in the capital raising process. I realized then that I could use my experience to create a comprehensive marketplace that would help to bring all of these markets from infancy to scale. I envisioned a regulatory compliant electronic transactions platform that would be a convenient place for investors to access and learn more about investment opportunities in a wide range of sectors, from social enterprise to sustainable infrastructure.
In order to make the space more manageable we began to map out the sectors we were working with. We separated the capital raising space into large buckets of social markets and environmental markets. We then further segmented these based on the different types of businesses that operate within each: under the social markets umbrella, we include social enterprises, community investing (Community Development Financial Institutions), social investment funds, global microfinance, sustainable agriculture, and cooperatives. For the environmental capital markets we segmented into the following sectors: climate change, conservation finance, renewable energy and cleantech, sustainable fisheries, environmental investment funds, and sustainable infrastructure.
I also see a significant opportunity in the environmental credit markets, and decided to set up a separate platform to facilitate credit trading, Mission Markets Earth. The Earth Platform has trading capabilities for a multitude of environmental credit mechanisms, including carbon credits, water quality credits, renewable energy credits (RECs), fisheries catch shares, habitat credits, transferable development rights (TDRs), biodiversity offset credits, and many more.
Article by Michael Van Patten, who during his 25 years of experience on Wall Street was integrally involved in the design and implementation of private placement and illiquid security transaction platforms for several companies. Michael co-founded the highly successful NYPPEX - the leading provider of liquidity services for secondary limited partnership interests and private equity portfolios for institutional investors. Previously Michael worked many years at Bear Stearns & Co, Inc as an institutional sales and trading professional.