After restarting this winter, Intersect, a startup in the American Underground on Main in Durham, is about to start a four month beta development process for its software to help fund managers invest in assets that deliver high returns, but also are environmentally friendly and climate-wise.
Truman Semans, CEO and co-founder tells WRAL Techwire that the company was founded in 2012 but restarted this winter. The 15-employee firm just closed on $415,000 from a strategic investor in Baltimore, MD, and a well known Charlotte investor.
Like the others on the company’s leadership team, Semans has rock star credentials in integrating environmental concerns into investment strategies. He was previously CEO of Element Captial Advisors, co-founder of USCAP, partner of GreenOrder, a McKinsey consultant and an International economist with the U.S. Treasury Department.
It has signed its first Beta customer and will add one or two more. “We’re doing back and front end work we know we need to do. It could be just a couple of weeks,” Semans says.
Predictive software coming
The company is developing predictive software to help large asset holders and the firms that manage their money to generate higher returns from thematic investing while reducing climate change related risk and environmental impacts.
“We are developing the most powerful tools available to integrate climate and other environmenta lactors into asset allocation, portfolio construction, and investment processes.
“Our prototype leverages complex data and logic licensed from McKinsey & Company to show the potential to systematize vast bodies of research and create a platform that is superior to competing products in terms of analytic approach, algorithms, variables covered, access to hard-to-find data,and cost.The software will incorporate advanced architecture, machine learning, and natural language processing to continually refine logic, derive better insight from data, and adapt to a rapidlychanging world,” says the company’s two-page overview.
Lots of money looking to go to work
He explains that even though a lot of capital is earmarked for environmental and climate friendly investment vehicles, fund managers and analysts have been wary of them, distrusting the analytics they’re currently using.
The need for capital flows to address climate change globally is in the $400 billion to $600 billion a year range, so providing software that accurately measures climate risk, benchmarks, and other analytics could have “a big impact,” Semans notes. “Lots of money is looking to go to work here.”
The company overview cites these stats:
In 2015-16, large asset owners committed to divest $3.3 trillion from carbon-intensive companies.Global investment in climate solutions is exploding, reaching $391 billion for renewable energy in 2014 and hundreds of billions more for clean transport and more. And 435+ global large cap companies are pricing carbon into Capex, M&A, R&D, etc.; by 2017, 500+ more will begin.
“The history of responsible investing has a weak track record, mostly because of human bias,” Semans says. The Intersect software “Will transform the way investors approach this theme.”\
“We approach investing with sustainability and the environment in mind, but with the objective of high returns. We go in smartly, in a data-driven way,” he says.
Semans says The American Underground is a “great environment. Every day it is proving that the sum is greater than the parts. Everyone is trying not just to make themselves better, but the community as well.”
