Jochen Wermuth

Jochen Wermuth
Jochen Wermuth
Born	(1969-12-13) December 13, 1969
Nationality	German
Alma mater	Brown University
Occupation	Founder and CIO Wermuth Asset Management
Website
www.wermutham.com

Jochen Wermuth (born 13 December 1969) is a German impact investor living in Berlin. He is founder and Chief Investment Officer of Wermuth Asset Management (WAM), a German family office and investment advisory firm, committed to 100% impact investing: Every investment must have at least some positive impact on the "environment, on social or governance issues" (ESG) in addition to a positive financial return. This does not necessarily imply lower financial returns. On the contrary, Jochen Wermuth has demonstrated that if one has impact goals which also help profitability, such as investing in resource efficient companies implementing policies to counter bribery, higher financial returns can be achieved.^[1]

Jochen Wermuth is a member of the steering committee of the www.divestinvest.org movement in Europe. Divestinvest invites investors to pledge to divest over 3-5 years from fossil fuels and invest in renewable energies and resource efficiency, for both moral and financial reasons: Unless action is taken, climate change will be so fast and violent, humanity will not be able to adapt and survive. The "carbon bubble" is about to burst, causing severe losses to all who have not divested by then (see section on carbon bubble below).

He has also served as an Advisory Council Member of the World Economic Forum's Community of Global Growth Companies. In this capacity he promoted discussions at Davos about the need to move to a "circular economy model" - a waste-free, market- and renewable power-based sustainable economic model, where lease agreements with users replace today's purchases by consumers in the linear (take-make-consume-dispose) economic model.

In the 1990s he was an EU-TACIS and World Bank financed adviser to the Russian government under Yeltsin on the transition to a market economy during the immediate post-Soviet period. He thus remains a frequent commentator in the media on Russian economic matters.^[2][3][4]

Biography

Jochen Wermuth was born in Boston Massachusetts, where his parents Dr. Dieter Wermuth and Professor Dr. Nanny Ellen Wermuth were studying on Fulbright scholarships at Tufts and Harvard, respectively.^[5]

He is the eldest of their four sons, Martin (1974), Peter (1976) and Ulli (1981). Jochen graduated magna cum laude and with honours from Brown University, and holds a BA in Mathematics and Economics and MA in Economics. He also passed his qualifying exams for a Doctorate in Economics at Balliol College, Oxford.^[6] He is married with three children to Russian ecologist Alexandra Kornilova.

In 1993, Jochen Wermuth became an EU-TACIS adviser to Russia's Ministry of Finance in the area of "fiscal policy framework development" based on his studies of the transformations following German unification. He co-founded the World Bank sponsored Economic Expert Group ^[7] under the Ministry of Finance of Russia and headed it between 1995 and 1997.^[8] In 1997, he joined Deutsche Bank's Global Markets Division in London as Director of Russian debt capital markets origination, working from Moscow as a member of the management committee responsible for setting up Deutsche's fully licensed subsidiary there.^[1] While working for Deutsche Bank, from 1997 to 1998, Jochen Wermuth and his team raised around $8 billion in financing for Russia. He left Deutsche Bank with an outstanding bonus claim for $37m an issue which was eventually settled amicably out of court.^{[9][10][11] [12]}

In 1999, Jochen Wermuth became the Founding Partner and Chief Investment Officer of Wermuth Asset Management GmbH, a family office and investment adviser committed to "delivering sustainable value".^[13][14]

In 2000 Wermuth Asset Management GmbH undertook its first investments in renewable energy, together with Russian Nobel Prize Laureate Aleksandr Mikhailovich Prokhorov, with the aim to reduce the cost of solar grade silicon significantly. Jochen Wermuth learned quickly that his personal and family wealth alone was insufficient for such a major project, and he started raising capital through funds, with an ever increasing allowance for private impact investments, culminating in the Green Gateway Fund in 2011, and Green Gateway Fund 2 in 2015, both fully dedicated to investments in EU resource efficient companies and helping them to sell to emerging markets, where energy consumption per unit of GDP often exceeds that of the EU by factor four.

In 2012/2013 Wermuth Asset Management GmbH was a member of the Community of Global Growth Companies of the World Economic Forum and Jochen Wermuth served on the communities' advisory board. In this capacity, he promoted the discussion of the "circular economy" as presented by McKinsey for the Ellen MacArthur Foundation at Davos, with Axel Weber, Chairman of UBS and former Chairman of Germany's Bundesbank concluding the Annual Meeting 2013 with the comment that there is no future for humanity or for the global economy unless one moves to a circular economic model.

He is a member of the board of the Liberal Mission Foundation and a supporter of Greenpeace.^[15]

Public profile

Jochen Wermuth first got known to the general public when German TV station Suedwestfunk did a documentary about his work in the Russian Ministry of Finance "Der Taschenrechner des Kreml, 1997".^[16] He has since become a regular commentator on the global macroeconomic situation and on Russia in the international media. ^{[2][17][18][19][20]}

First to warn of potential Russian default

Yevgeny Yasin, ex-Minister of Economics wrote in his article in a book about Russian economic reforms that Jochen Wermuth, head of the Economic Expert Group under the Ministry of Finance of the Russian Federation, was the first to warn of a potential default of the Russian Government in a memo in the fall of 1996 which he forwarded to Chernomyrdin.^[8]

Questions to the Russian Authorities on corruption and investment climate

In the summer of 2010, JW together with Nikita Suslov published an article "How to improve Russia's Investment Climate".^[21] In the fall of 2011, ahead of the Russian Duma elections and the general public uproar, Jochen Wermuth challenged Putin on the progress made in terms of fighting corruption and in terms of improving the Russian business climate at the VTB conference.^[22]

Commitment to sustainable growth

Jochen Wermuth is a sponsor of Greenpeace since 1992,^[23] a member of "Eurosolar"^[23] since 2000 and did his first investments into clean tech in 2000, starting with an integrated production chain from quartz sands to mono-silicon with the late Nobel Prize Laureate Alexander Prokhorov. He found that he required a stronger balance sheet to see through such important break-through technologies, turned his family office into an investment advisory business and gradually built the team and assets dedicated to investments in sustainable growth, culminating in the "Green Gateway Fund"^{[24][25][26][27][28][29]} dedicated to investing in leading clean tech companies ^[30] with technologies relevant to the Russian-Kazakhstan-Belorussian Free Trade zone to which entry to such a market via Russia's region of Tatarstan might be attractive.^[31][32]

Carbon Bubble

Jochen Wermuth has shown with reference to work of Bill McKibben and the Carbon Tracker, that the "carbon bubble", fossil fuel assets which will need to be written off as they are no longer economically viable (so called "stranded assets"), has been growing at a rate of nearly $1 trillion a year and stands at $22 trillion of such investments as of 31.12.2014. He argues that unless this issue gets addressed early on by investors and regulators, the global impact could be worse than the burst of the mortgage bubble, which reached $15 trillion of assets in 2008, and caused a global financial crisis and recession. The original argument behind the "Carbon Bubble" has been that if one is truly committed to the goal set by the United Nations of not allowing CO2 emissions beyond a level which would cause more than 2 degree higher global temperatures, then only 20% of the proven fossil fuel reserves could be burned. The assumption was that global governments would get together and impose a global price or tax on carbon emissions or a cap on the amount of fossil fuels allowed to be burned, and that at that moment fossil fuel companies would have to write off 80% of their proven reserves. Given wide-spread skepticism that this would ever happen, even if burning more oil would mean climate catastrophe, only few have taken note of the carbon bubble risk.

Jochen Wermuth, however, has argued, that in late 2014 and early 2015 the world we live in has fundamentally changed, and that the carbon bubble is now likely to burst not because governments take actions, but because of market forces: In December 2014 in Dubai a 200MW power plant was commissioned to a bidder offering solar power at 5.7 US Dollar cent per kilowatt hour. Oil would have to fall to $10/barrel to be competitive, gas to $180/MCM, meaning that most reserves will have to be written off simply because the expected oil, gas and coal prices will collapse due to competition from fossil fuels. For the last skeptics, in March 2015, in Austin, Texas, a photo-voltaic power supplier outbid a natural gas power provider even post the shale gas boom.

Wermuth Asset Management

After leaving Deutsche Bank, Wermuth founded his own family office focusing on sustainable investments, Russia and the CIS.^[33] Wermuth Asset Management (WAM) is an international investment advisory firm headquartered in Germany and with branches in Russia and the Netherlands. The firm's main clients are investments funds it sponsors, which in turn have high-net-worth individuals, family offices, fund of funds, pension fund and sovereign wealth funds as investors. WAM advises funds in several alternative asset classes, including long/short equities activist value investing, real estate development and private equity, with a focus on sustainable growth and clean-technology funds spanning the EU and Russia, which make up 60% of AUM. Since its foundation in 1999, WAM has advised on more than $1 billion of investments in Russia. WAM has sponsored the World Economic Forum's "Community of Global Growth Companies" or "Champions of Tomorrow" initiative, Transparency International^[34] and the "Deutsch-Russische Jugendparliament".

Other interests

Wermuth is a member of the Young President's Organization and is its inaugural spokesperson for the YPO Global Pulse,^[35] a member of Eurosolar founded by Hermann Scheer, a member of The Liberal Mission of Russia, the German Association for Foreign Policy (DGAP), and a supporter of Greenpeace. His philanthropic activity includes support of renewable energy research at Brown University, support of the New Economics School in Moscow, to Russian orphanages and efforts to protect the grave of artist Kazimir Malevich.^[36] He is a runner, swimmer and cyclist and used to ballroom dance, play tennis and soccer.

References

External links

• Official website