Page 81 - MELLBY_MAGASIN_2023_ENG_LOW_UPPSLAG

FMG CIRCULAR INVEST
FMG Circular Invest continuing
to explore, learn and grow
Just over a year has passed since Feralco and Mellby Gård launched
the FMG Circular Invest investment initiative. To date, it has added
four investments to its portfolio and expects to explore further
opportunities in water treatment.
The challenges of drinking water and wastewater are
continuously increasing alongside population growth,
urbanization and a growing awareness of the impact of water
management on the environment. Through the joint investment
initiative FMG Circular Invest, Mellby Gård and Feralco have chosen to
focus on early investments in innovative companies working to develop
solutions that improve the supply of drinking water and wastewater
management.
“There, we act as a sounding board for the management of the
“The background to starting FMG Circular Invest was that we saw
the opportunity to combine our expertise and network via Feralco
with Mellby Gård’s long-term active ownership strategy,” says Mikael
Helmerson, Deputy CEO of Mellby Gård.
“The lack of clean drinking water is a huge problem and a major
effort is required to solve it,” says Filip Schager, Director of Business
Development at Mellby Gård. “In parallel, we’re also seeing new
legislation regarding water treatment and related processes, which
creates opportunities for innovative technologies and companies.”
The investment initiative has three focal areas. The first is
phosphorus removal. Since phosphorus contributes to eutrophication,
solutions that remove phosphorus from wastewater are needed.
The second is circular and energy efficient solutions linked to Feralco’s
value chain. This involves finding innovative technical solutions linked to
the water treatment products that Feralco manufactures and distrib-
utes. These include raw materials for the manufacturing process and the
possibility of energy recovery from the organic materials that the water
treatment products bind to when used.
The third focal area is the separation of microplastics and micropo-
llutants, with e.g. the separation of non-degradable PFAS pollutants
being an area in need of innovative technical solutions.
AN EVENTFUL AND INSTRUCTIVE YEAR
At the helm of FMG Circular Invest are Mellby Gård’s Mikael Helmerson
and Filip Schager together with Feralco’s two CEOs Ludovic Huitorel
and Stephen Childs. More than a year after its launch, they recognize
that the initiative has been successful.
“We’ve already made four investments, so we’ve proved to ourselves
that there are a lot of investment opportunities in this market, which
is great,” says Stephen Childs. “Also, we’ve gradually become better at
identifying and evaluating them. We’ve largely kept the requirements
profile and focal areas we had from the beginning, but as we’ve learnt
more, we’ve also become more flexible.”
The investment portfolio currently includes the companies I-Phyc,
Spec-Imaging, Aqua Green and Acwa.
A STABLE AND SUPPORTIVE PARTNER
As a partner, FMG Circular Invest, like Mellby Gård, strives to be an
active, long-term owner that contributes knowledge, expertise and
networks.
“FMG Circular Invest owns between 10 and 20 percent, and we’re on
the boards of the companies we’ve invested in,” says Ludovic Huitorel.
companies and support them where we can. In some cases, we allow
them to test technologies and equipment at Feralco’s manufacturing
facilities and share our relationships and networks.”
“One of the things that distinguishes FMG Circular Invest from other
investors is our long-term approach,” says Mikael Helmerson. “There’s
no requirement for us to sell, nor do we rule out buying more shares
in the future. We’re actively looking for new companies. Now more
companies are starting to contact us directly, because they’ve heard
about us making this kind of investment. We’re very happy about that.”
OPEN TO NEW PARTNERSHIPS AND OPPORTUNITIES
FMG Circular Invest has been in contact with nearly 200 companies
during the year and has held around 50 individual meetings to discuss
the possibility of collaboration. So far this has resulted in investments
in companies based in Sweden, Denmark, the UK and France.
“We’re open to receiving more enquiries from entrepreneurs, and
we’ve also started to look beyond Europe, for example at North
America,” says Filip Schager. “We’re currently seeing more focus on the
PFAS issue there than in Europe.”
For FMG Circular Invest to become a partner in new companies, a
number of criteria need to be met. Should it emerge that an interesting
company is not sufficiently mature when contact is made, this doesn’t
mean that the door is closed for good.
“If we are to invest in a company, it’s important for us that the
fundamentals are in place,” says Filip Schager. “There must be strong
technology combined with a strong team. These are important
foundations for success where we’re concerned, and only then can we
provide the best support. However, if these foundations are not yet in
place, we don’t rule out cooperating in the future, provided that the
company has developed. We’re having discussions with a couple of
companies that we believe may be of interest in the long term.”
As general expectations regarding company valuations have fallen
during the year, there is a greater likelihood of more transactions. FMG
Circular Invest will continue to work with its portfolio companies in
2024, deepen its knowledge and hopefully make more investments, the
aim being to become more recognized in the market.
81