How did the history of Royal Eagle lead it to its current objectives?
AM: We began as advisers to clients of major banks and financial institutions. I worked at JP Morgan Chase and Citibank, while Mark came from Morgan Stanley. Mark has the greater exposure and experience in this field. We realized that our specific expertise and relationships in the world’s capital markets provided us with some very unique opportunities in middle markets in the US and Latin America. As we advised our clients regarding their projects, we realized through their experiences that access in Latin America to capital markets was very limited. This led us to figure out a strategy through which we could provide solutions, while also owning a balance sheet of our own by attending the needs of operators in Latin America.
We realized we could provide our services to a niche market in Latin America. While major companies have already solved some of these capital structure challenges, companies in a middle market, ranging from US$2 million to US$150 million, might need our services. The companies we are primarily talking about range from US$30 million to US$70 million, these companies are very well positioned in Mexico and Latin America, but they struggle to get financing. We think the Capital Markets in Latin America, for example, are not as dynamic and developed as they could be, compared what we experience in USA or Europe. This creates additional opportunities for us and for our strategy and business models.
MV: I believe in Alejandro’s vision because it is focused on doing the best filtering possible, regarding initiatives, projects, companies and clients. In other words, we believe in doing good business with good people. That is our internal mandate, plain and simple. We value ESG enormously and believe that ESG principles and practices should be implemented with a sense of objectivity. What this means is that ESG needs to be understood outside of political polarization. It needs to be understood in terms of the role and function that it plays in helping people and supporting future generations. We want to be proud of what we build and its social impact. We want that impact to go beyond our brand name and reputation or that of our partners, clients and collaborators. [AM1]
Q: What projects are the most strategically important to you?
AM: We have three main verticals. One is wealth management practice based in Houston; we have a digital bank startup to attend Mexico, Panama, and Colombia unbanked population and finally there is our Royal Eagle Green[AM2] Income Fund, which we now are focusing on. The Royal Eagle Green Income Fund is a 100MM USD facility under a USA custodian, 10% annual coupon and a third-party Green Bond stamped by Cicero. These projects are based in the US, mainly in Texas, along with Mexico, Costa Rica, Panama, Colombia, and Brazil. They focus on wind, solar and hydroelectric energy, along with the construction of green buildings and the evaluation of green infrastructure potential in existing facilities, such as data and logistics centers. In general, we try to keep an open mind regarding any opportunity to develop green and renewable energy verticals.
We are now in capital raise and due diligence process to acquire and operate over 350MW of renewable energy projects related to solar, hydro, and waste to energy projects. We also are in advanced conversations to develop a green real estate project in Huatulco, Mexico.
Even though Covid-19 Pandemic presented great challenges, the Royal Eagle Team remained focus in launching the Green Fund. We are incredibly pleased with the results and we are ready to perform.
Q: What are some of the most significant ways in which you are de-risking your investments?
MV: Cicero Green is the company that will be verifying our green bond stamp. They are the world’s largest leader in green second opinions, with over US$200 billion stamped, including the sovereign funds of countries like Sweden and Norway, along with Fannie Mae and Freddie Mac bonds in the US. Part of my job is to de-risk our assets and portfolios as much as possible. Cicero Green provides a great amount of breadth and dynamism to all de-risking activities due to their status as a European independent third-party auditor. This is all common sense but unfortunately in finance you do not fund common sense that often. Clients will remember the money they lose more than the money they make, so this kind of institutional backing for our decisions is important when it comes to explaining and justifying them. In general, we impose very strict conditions on anybody who we do business with in this regard. We will not finalize deals with anybody who has not done their due diligence.
[AM1]This is all great, thank you! No changes!