The following interview is a discussion between RealPort’s CIO, Jon Boles and Director of Market Outreach, Ina-Alice Kopp. This piece is a part of our “In Conversation with RealPort” series.
Ina-Alice Kopp: Firstly, what is your position within RealPort?
Jon Dyar-Boles: I am the Chief Investment Officer.
And, what is your area of expertise? How does it relate to your position within the company?
I began my career as a project finance banker, structuring and arranging finance for real assets, infrastructure and energy. At the time, I wanted to realise investments that made a difference in people’s lives, while delivering value consistently over time.
After that, I went into the energy industry and spent a number of years working for a major global utility, where I headed the Structured Finance team. This role involved financing the construction of renewable power plants and energy networks, and led to my becoming the Chief Financial Officer of a national utility. So, my career in the early days was centred around assessing, analysing, financing and managing real assets.
A decade ago, I began focusing on sustainability, moving to cleantech and renewable investment. At RealPort, I bring my knowledge and experience of the various ways to approach, invest and manage an asset to bear.
Of all the experiences that you have gained over the years, which are the most relevant to RealPort’s business model?
The most important function of the CIO is sourcing potential investment opportunities on behalf of investors. Having an extensive network built through years in all the different facets of real assets is incredibly helpful in understanding the markets, identifying and accessing people active in the sector.
Another crucial element is assessing and evaluating their advantages and disadvantages, so having an understanding of the assets is critical. RealPort provides this identification and assessment for alternative asset investment opportunities and this is where my experience comes into play.
RealPort’s value offering is two sided. What value would you say does RealPort brings to investors?
Access is incredibly important and a major challenge for smaller institutional investors. An investor who wants exposure to sustainable real assets for their portfolio would typically have to build a team, the skill set and a network in order to find and manage assets. Alternatively, they can write a cheque to a blind pool where they don’t have any control or a direct relationship with the asset itself. Investors want to understand where their money is being invested and how that investment fits into their overall portfolio.
We help make these assets accessible by working with our partner Scope Analysis. They assess the asset holders’ qualifications and experience and carry out an analysis of the assets themselves, looking at the historical returns and projecting future outcomes. We bring that knowledge — the results of the Scope analysis — to investors interested in understanding and accessing this asset class.
With that being said, what is the value that we bring to asset holders?
We offer a unique opportunity to unlock value in portfolios. The asset holders we work with have stakeholders that want to see returns from the assets held on their behalf. That value may be there on paper, carried in the books so to speak, but that can be hard to justify unless you’re actually making transactions.
Our solution solves the dilemma: “Do I sell and give up all the future upside and potential that a particular asset holds, or do I go to a bank and borrow against the asset and accept covenants and restrictions and fixed repayment obligations?”
Our profit participation proposition provides an alternative: asset holders can essentially release a portion of the value of an asset — up to 25% — without selling the equity stake outright, and without the restrictions which a debt facility usually brings.
This “third way” of realizing value through a partial exit is unique, or at least extremely uncommon, in the market and is a real alternative to unlock value. As pressure grows on asset holders to demonstrate value creation and return that value to their investors, it will become an important option for the market.
Speaking of values and our value proposition, how do you see RealPort’s core company values reflected in our product?
One of our key values is of course sustainability, reflected in the fact that we have committed to having an impact on sustainable finance through unlocking direct access to renewable energy assets. This is important not only for investors who can increase their commitments to ESG-driven investments, but also for creating an additional avenue for unlocking value in the sector. Overall, this value realisation aspect is going to lead to positive developments within the segment as it will attract more capital to sustainable investments.
I would also mention our inclusivity value here, as part of our ethos lies in creating access to assets for investors who generally don’t have the opportunity to make sustainable investments of this kind for their portfolio.
Finally, but perhaps most crucially, we’re really all about solving problems, for investors, for asset holders, and for real asset markets overall. I find it exciting to grapple with the issues that we are tackling, and to create and deliver meaningful solutions to both asset holders and investors that make a difference for them.
Can you share a little about the rest of the team, the people behind this innovative product?
One of the things that attracted me most to the platform was the quality of the team the founder, Ekow, was bringing together — top-flight experts like Sandra [Kumhofer, General Counsel] who has a wealth of experience in both fintech and regulation, and Zeel [Shah, Head of Product], who is leading product development. Ekow has managed to assemble a diverse and multi-cultural team, based upon and aligning us with a singular purpose — to bring transparency and tradability to real assets.
It is undeniable that you have a wealth of experience within this sector. When building a product such as the one we are creating, what factors are key to ensuring success in the early stages?
First and foremost, asset quality: our reputation is built on delivering what we promise to investors by offering an attractive product. To ensure we deliver on that, we are building on our working relationship with Scope, and we have also successfully attracted professionals with years of market experience to serve as an independent Asset Selection Committee. The ASC will review every proposed transaction and confirm that it fits within the guidelines we have set out for assets.
You mentioned that you are particularly excited about the problem-solving aspect of the product. What else excites you about the future of RealPort?
What drew me to RealPort was the vision of creating a platform which has a tremendous amount of potential. We’ve chosen to focus on sustainable real assets in particular because it’s intuitive and investors align with it very much. Yet, as a company, once we’ve established that foundation, we can branch out into many more arenas: we can do debt, we can do other types of investments like private equity, we can go across horizontals as well as verticals. There’s a very broad range of applications, particularly as we bring in trading — we are creating potential for investors to reshape their portfolio in the future. The application of the technology to the markets is truly solving a fundamental problem, and has a tremendous amount of transformative power.
You can discover further insights into RealPort and our Partial Exit proposition in a detailed interview between Jon Boles and Infrastructure Investor, here.
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