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Merging the Worlds of Finance, Investing, and Environmental Impact

By: Martin Aares 21 Nov 2019

This post was originally published on the HBS Admissions MBA Voices blog.

Martin Aares (MBA 2001) had always known his childhood interest in the environment would be part of his life, but he wasn’t sure that passion could be part of his business career, too. Now a managing director for Closed Loop Partners, he reflects on finding his way to a career that merges the worlds of finance, investing, and environmental impact. 

How did your interest in impact investing evolve? 

It’s funny, I was involved in the environmental youth movement when I was growing up in Norway in the late 80s, but I thought I wouldn’t be able to continue with that interest until later in life. I had a passion for business and finance, and they seemed like two very separate worlds. After graduating from HBS I worked at Goldman Sachs for a couple of years, where I was exposed to a couple of clean energy companies. At that point, I thought, “Hmmm. Maybe there’s a way to work on projects with a purpose you’re personally passionate about.” So, I joined GE Capital and helped launch their renewable energy investment group. Those two seemingly separate worlds coalesced into one; I was able to use the tool kit I’d built over the years from my private sector experience in consulting and traditional banking in a space where I felt I was having a real impact. After GE, I co-founded a sustainable investment firm, Novus Energy Partners, and for close to two decades now, I’ve been investing in companies that deliver both financial and environmental returns.  

What was your plan coming into HBS? 

I had done quite a lot of strategy work and wanted to get more transaction experience. My courses were more finance-heavy as a result. Acquiring that knowledge was one of my functional goals—and I achieved that—but the relationships I built at HBS, including with my wife, Leadership Now founder Daniella Ballou-Aares (MBA 2001), have had the biggest meaning and impact in my life. 

Could you tell us what you mean by the “circular economy” and what you do at Closed Loop Partners? 

The circular economy is simply a system focused on minimizing waste and making the most of the resources we already have. That’s in contrast to the linear system, where we extract resources, make products, consume them, and dispose of them. The circular economy uses what is already there, which saves on the extraction and processing piece, then keeps those materials in the system. If you can avoid both extraction and waste disposal costs, it can create significant margin growth for consumer goods and manufacturing companies. Closed Loop Partners manages capital for some of the largest global retailers and consumer goods companies as well as financial investors, and works across the life cycle of the circular economy.  We have an innovation advisory arm, a venture capital platform, and a credit fund that helps grow companies. Earlier this year we launched our buyout fund focused on scaling mature companies in the sector, which I now co-lead.  

Can you give me an example of a deal you’ve worked on recently? 

We’re just closing on our first deal out of the buyout fund, which is the leading independent recycler in Texas. It’s a company that has been family-owned for 25 years, with a vibrant, strong management team, but the owners are ready to step back and the company has a lot of growth opportunities to expand. We’ve known the owners for well over a decade; they made the decision to partner with us because our values aligned.  

Do you have any advice for how students can best familiarize themselves with different career areas and job functions in the clean energy space? 

Being actively involved in the various clubs that focus on business and the environment is one way to build a knowledge base. There are so many more options now than there were when I was a student. I do remember enjoying the Wine and Cuisine Club! But seriously, finding peers with a common interest can open up a lot of possibilities, for instance better understanding innovative approaches in different parts of the world. 

Has the HBS network been a useful resource? 

Yes, absolutely. When I joined GE, several HBS alumni who were already working at the company were helpful in terms of quickly helping me get the lay of the land. And at my former fund, Novus Energy Partners, we leveraged the HBS alumni network and Career Services as a recruiting tool to find and hire great candidates for open positions.  

What do you like about your work? What keeps you going? 

I’m working with an incredible group of people to help solve the issue of our lifetime. Unless we make significant changes there will be more plastic than fish in the ocean by 2050. That and so many indicators are alarming, and as leaders who make a difference, the private sector can have huge influence over the future of our planet. We are changing the conversation by showing a path forward which delivers both great financial and environmental returns. I’m fortunate to work with colleagues who are intelligent and driven and we have a shared sense of values that creates a really good and inspiring community.