Rob Kaplan Co-Founder and Managing Director rob@closedloopfund · UNLOCK 5x CO-INVESTMENT . Fund...

Rob Kaplan Co-Founder and Managing Director [email protected]

Investors include:

The Closed Loop Fund is a social impact fund investing $100M to increase the recycling of products and packaging.

CLOSED LOOP FUND | PAGE 3

Nationally, municipalities incur billions of dollars in fees disposing of packaging in landfills

BRITISH COLUMBIA

ARCTIC

NEW BRUNSWICK

QUEBEC

ONTARIO

VIRGIN ISLANDS

MEXICO

Cities spend $5+ billion annually to truck, rail, and barge waste to landfills

STEEL: $285,000,000

PET: $2,917,345,309

PVC: $136,000,000

PP: $1,273,600,000

GLASS: $97,325,060

ALUMINUM: $1,446,228,571

HDPE: $2,854,896,000

LDPE/LLDPE: $726,000,000

PS: $371,000,000

PAPER: $1,294,625,417

This waste is $11b+ of material that could be used to make new packages and

products.

Collective Action: System Problems Require System Solutions

4 –

Historical Model

Various companies grant money to cities and projects; few (if any) come with measured and

reported results.

Grant amounts are often not large enough to create measurable and systemic change.

$2.59M grant to Chicago for carts

$300k to KAB for public space recycling

$250k for public space recycling

$100k for winner of community recycling contest

Closed Loop Fund Model

A social impact investment vehicle that provides low interest loans to projects at scale required to achieve measurable and systemic

change.

Loans are repaid via savings from increased landfill diversion and/or revenue from sale of

commodities

$100M to lend to projects with significant double-bottom line impact


COLLECTION PROCESSING

MATERIAL SCIENCE &

PRODUCT DESIGN

The Closed Loop Fund unlocks recycling value by providing 0% and low interest loans to cities and companies to build recycling infrastructure.

WE INVEST IN:

We invest in replicable models that remove barriers to an effective and financially viable recycling system

SCALABILITY

FINANCIALS REPORTING

TONNAGE

CRITERIA:

CLF utilizes pay for performance loan structures in investments where feasible • As a municipality recycles more, their landfill fees decrease and revenue from sales of recyclable

commodities increase. • Projects can pay back their loan to CLF as the cash flows are realized.:

Memphis: 100k households

Residents currently pay to send 100k tons of waste to

landfill $5M investment in collection

carts

Memphis: Post Investment

30k tons

70k tons

$1.5M of savings used to repay

$5M loan in 3.33 years, and enjoy

all future savings.

Example: Memphis, TN

Residents now only send 70k tons of waste to landfill, saving

spend $1.5M per year

100k tons


2015 Sample Investment

Quad Cities, IA Investment: Upgrade local Material Recovery Facility (MRF), Trucks and Carts to single stream Total Project Cost: $10,725,000 Closed Loop Fund Portion: $2,725,000 Co-Investors: Scott County, IA ; Iowa Department of Natural Resources Impact over 10-years: 86,000 tons diverted from landfill, 250,000 tons GHG saved.



Plastic Recovery Facility (PRF) Baltimore, MD Investment: Create profitable market for hard-to-recycle rigid plastics (#3-7) for the east coast.

Reach: Communities within 500 miles including VA, PA, MD, DC, NY, MA, OH, NC

Total Project Cost: $11,000,000

Closed Loop Fund Portion: $2,000,000

Co-Investors: Canusa Hershman, QRS

Impact Over 10-years: 650,000 tons diverted from landfill, 670,000 tons of GHG saved.


Innovation of Closed Loop Fund Model

LARGE SCALE LOANS Zero interest loans in amount required to achieve measureable and systemic change drives proves the model and drives accountability.

Revenue-backed loans are repaid via savings from increased landfill diversion and/or revenue from sale of commodities.

SYSTEM CHANGE: Capital is pooled from consumer goods companies and retailers with a vested interests in increased recycling rates. Affect a system that no company can do alone.

SCALABILITY Each project will be leveraged to inspire exponential increases in investment from other municipalities interested in self funding and replicating success of the a similar project in their location.

UNLOCK 5x CO-INVESTMENT Fund will co-invest in select projects with private investors to enable projects to have an effective IRR for private investors, spurring and increasing in private investment.


UNLOCK PUBLIC AND PRIVATE FUNDING NATIONALLY Create scalable models that prove financial value to funders across the country to help bring modern recycling programs to homes across the US.

FINANCIAL TO MUNICIPALITIES $21.2B in avoided landfill tipping fees and revenue generated from selling diverted commodities.

ENVIRONMENTAL 50 million metric tons of GHG reduction;

SOCIAL 20,000 incremental local jobs vs. land-filling.

Anticipated impact of the fund The Closed Loop Fund targets following impact could be achievable over the life of the Fund (10-years):

International Applications


Material Processors

Consumer Engagement/

Marketing

MRF’s/AD Facilities

Collection Services

Product / Package Manufacturers

How We Build the NextGen System


Obstacles

•

•

•

•

Obstacles and Solutions

Solutions

•

•

Innovation and Business Models Exist

Rob Kaplan Co-Founder and Managing Director [email protected]

Appendix


Portage County, OH Investment: New Single Stream Recycling Carts and Trucks in Midwestern semi-rural community Total Project Cost: $3,100,000 Closed Loop Fund Portion: $3,100,000 Impact over 10-years: 37,000 tons diverted from landfills, 110,000 tons of GHG saved



Momentum Recycling – Glass Processing Facility Denver, CO Investment: Improve glass processing profitability through an innovative business model and technology

Impact Over 10-years: 600,000 tons, 165,000 tons of GHG

Total Project Cost: $12,000,000

Closed Loop Fund Portion: $1,500,000

Interest Rate: 3.25%


The Closed Loop Fund Structure and Criteria


Investment Commitment, Process, and Repayment The Closed Loop Fund is a loan fund that pays its investors back (unlike grant programs). Investors can expect to receive the principal on their investment returned in full over a 10 year period.

2014 2015-2020 2021-2025

Investors commit up to $10m to fund qualified projects over the next 5

years.

As projects are approved, investors write checks for pro rata portion.

Any loan repayments to CLF are recycled into

additional investments.

CLF repays investors.


Fund Structure FINANCIAL PARTNERS (CPG companies and Retailers)

LOANS TO MUNICIPALITIES

SAMPLE LOAN #3 Emerging

technologists

SAMPLE LOAN #2 Processing facility

SAMPLE LOAN #1 Carts for recycling

SAMPLE LOAN #4 Remanufacturing

facility

Landfill cost savings and commodity revenue

Capital returned and unlock funding

for similar projects across

the country

Loans to municipalities

and companies servicing

municipalities

FUND STRUCTURE

• 0% loans to municipalities for investments in recycling and waste reduction infrastructure and programs.

• Below market interest loans to private companies that build infrastructure for recycling and waste reduction.

• Loans are repaid via landfill diversion savings and or commodity revenue from the increase in recycling.

• Fund co-invests with local state agencies, economic development corporations (EDC’s), local banks, foundations and other relevant institutions, thereby expanding the amount of capital invested.

REPAYMENT STRUCTURE • Investment period is 5 years.

• Loans are on an average of 7 years.

• Goal is to return all principle and interest to Investors by year 10.


Governance Structure

Management Team

• Sources potential investments

• Conducts due diligence, underwriting

• Selects investments to recommend to Board

Advisory Board

• ~10 investors sit on advisory board

• Reviews each recommended deal, full due diligence

• Provides guidance, feedback, concerns

• Assuming feedback is adequately addressed, Team presents to Committee

Investment Committee

• Independent committee of experienced institutional investors and business leaders

• Charged to ensure investment aligns with terms of the limited partnership agreement

Investor

• Receives capital call for each deal

• Final opportunity for review

Rob Kaplan Co-Founder and Managing Director rob@closedloopfund · UNLOCK 5x CO-INVESTMENT . Fund...

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