Tuesday, April 21, 2009

Richard Kauffman, former Goldman-Sachs Exe. now "King of Green"

Meet the green family

By RICHARD BLACKWELL Globe and Mail Update

Europe's wealthy Brenninkmeijer clan has sunk $6-billion (U.S.) into the green power sector, and a chunk of it is invested in Canada

One of Europe's wealthiest - and most secretive - families has emerged as a key investor in the global alternative energy business, and some of its money is being pumped into Canada's renewable power sector.

The Dutch-German Brenninkmeijer family, whose fortune was made in the retail clothing game, has quietly built up a $6-billion (U.S.) portfolio of green investments though its Good Energies arm, a division that takes early positions in renewables.

In Canada, Good Energies' portfolio now includes investments in wind energy developer Sequoia Energy, wind consultant Eolectric, wind and run-of-river power firm C-Free Power Corp. and solar-grade silicon maker 6N Silicon Inc.

And there's more to come, since the company allots about $500-million a year to boost its holdings or make new investments, and some of that will be invested in Canada.

Jean-Louis Brenninkmeijer, the soft-spoken family member who scours the market in this country for possible investments from his office in Oakville, just west of Toronto, said Good Energies wants to help build innovative firms. But any new partners will have to expect a hands-on approach, he said. The company usually buys a significant but non-controlling equity stake - around 30 per cent - and expects a seat on the board.

"If they are looking for a long-term partner and are willing to work with us on a daily or weekly basis and build up their business in the longer term, then we're a good partner," he said.

The Brenninkmeijers have got to where they are - reportedly the 15th wealthiest family in the world with a fortune of about $26-billion - by exemplifying that long-term view.

Their 160-year-old company, which now operates as Cofra Group, based in Zug, Switzerland, was established by German brothers Clemens and August Brenninkmeijer as a textile warehouse in the Netherlands village of Sneek in the 1840s.

The first C&A clothing store - named after the brothers' initials - opened in 1861, and it spread through Europe. There are now hundreds of C&A stores in Europe, Latin America and China.

The company has had some setbacks. It pulled out of Britain in 2000 in an embarrassing retreat that involved closing more than 100 C&A stores and the loss of almost 5,000 jobs. A few years later, daunted by a hotly competitive market, the family sold off its North American retail operations, including the Canadian arm, Comark Inc.

Comark had owned many chains including Ricki's, Bootlegger, Clark Shoes, Bretton's department store, Collacut luggage and D'Allairds.

Despite their highly visible retail businesses, the Brenninkmeijers themselves have maintained the lowest of low profiles. In the past they rarely spoke publicly, and revealed almost nothing about their holdings or their family.

Now, however, the latest generation is more open about their business activities, if not the family dynamics. They even publish an organization chart on a corporate website.

Over the decades, Cofra Group has expanded beyond its retail roots into real estate, financial services and private equity. Then, a few years ago, Marcel Brenninkmeijer - Jean-Louis's cousin - decided he was more interested in green issues than retailing. He started up a small renewable energy arm, and secured funding from Cofra to buy into that sector.

Those early investments have evolved into Good Energies, which is now run by Richard Kauffman, a former Goldman Sachs partner.
Mr. Kauffman says the group will continue to focus on a few key sectors - mainly wind, solar and green buildings. However, it now also has a foothold in battery technology, and "at some point it will make sense for us to de-emphasize some of the areas we're in and make commitments in new [ones]."

The biggest stake so far - and the company's most successful investment - is in publicly traded German solar cell maker Q-Cells. Good Energies took its first position when Q-Cells was still private in 2002, and its 48-per-cent equity stake is now worth several billion dollars.

In Canada, Good Energies made one successful exit from an investment, when wind farm developer Ventus Energy Inc., in which it held a minority position, was sold to French Energy giant Suez SA. Good Energies would have held on to its stake in Ventus had Suez not come along with its offer, Jean-Louis Brenninkmeijer said.

Mr. Brenninkmeijer, who is Good Energies' expert on North American wind power as well as its Canadian leader, says the company conducts extremely detailed due diligence before making any investments.

As the company's financing clout becomes better known, the number of potential transactions is increasing sharply. "This year I think I've looked at over 100 [potential] deals," he said, although only a very small number will come to fruition.

Good Energies' careful approach and deep pockets has been a boon for the renewable energy sector in Canada, said David Berkowitz, who runs an alternative energy investment portfolio at Ventures West Management Inc. in Vancouver. Ventures West is a co-owner of 6N Silicon, along with Good Energies.

"They have a deep intimate knowledge of the sectors in which they invest," Mr. Berkowitz said.

"They have a very long-term philosophy and they've been exceptionally successful in the renewable sector ... they're not interested in a quick flip."

Green investments

Canadian investments

6N Silicon Inc. A Toronto company developing a process to make silicon for the solar power industry.

C-Free Power Corp., based in Vancouver, is planning potential wind farms and river hydroelectric power projects in Western Canada.

Eolectric, based outside Montreal, identifies promising sites for wind turbines and secures the land rights. It then turns over projects to others to develop.

Sequoia Energy Inc., of Winnipeg, a wind farm developer, has several projects in the pipeline in Western Canada and the U.S.

Selected international investments

Q-Cells AG, a German solar cell maker.

Solarfun Power Holdings, a Chinese manufacturer of photovoltaic cells.

Jasper Wind, a company developing wind and solar projects in Greece.

Ice Energy, a Colorado firm developing technology that makes ice at night when power is cheap, then uses it to cool buildings during the day.



  1. I wish this family would buy back Eastern Mountain Sports in the United States, (headquartered in New Hampshire). It used to be a great outdoor retailer, but just hasn't been the same since they sold off their North American holdings.

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