Silver Beech Diversified Carbon Lease Revenue Pool I

Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt at limiting exposure to any single asset or risk. Modern portfolio theory (MPT), or mean-variance analysis, is a mathematical framework for assembling a portfolio of assets such that the expected return is maximized for a given level of risk.

The rationale behind this technique is that a portfolio constructed of different of assets will, on average, yield higher long-term returns and lower the risk of any individual holding.

The Silver Beech Diversified Carbon Lease Revenue Pool I, builds on this bedrock investment thesis, by assembling a high quality diversified pool of carbon offset leases, diversified by geography, lease term, property type

The value of carbon markets is reaching record highs as global climate actions gained unprecedented momentum in 2021. Carbon permits in the EU’s ETS reached a record high of 89 euro per metric ton in December, tripling the yearago levels and significantly outperforming equity indices. Reviving post- COVID economic activities, anticipation of the EU’s tightening climate policies, and more recently elevated natural gas prices have all fueled higher demand for EU carbon permits.

Similar dynamics are playing out in other regional schemes where prices for carbon permits in the California cap-and-trade market and the north- east’s Regional Greenhouse Gas Initiative (RGGI) were up 70% and 75% in 2021, respectively.

Such strong price actions across the world’s three most liquid carbon markets put a spotlight on carbon as a barometer for global climate policy actions and as an emerging asset class.