Dive Brief:

• Circulate Capital — an investment management company that originated as Closed Loop Ocean — has officially launched in partnership with Ocean Conservancy and Closed Loop Partners. The firm is led by Closed Loop Partners co-founder Rob Kaplan. 
• The company also announced an RFP aimed at Southeast Asian companies. Circulate Capital will invest in solid waste management and recycling organizations that have the capability of stopping plastic from entering the ocean, with a focus on five core countries: India, Indonesia, the Philippines, Thailand and Vietnam.
• Circulate Capital said in its press release that a 45% reduction in the amount of plastic entering the ocean can be achieved by boosting regional waste management and recycling industries. "South and Southeast Asian countries produce the most plastic waste, but largely because they lack the necessary waste infrastructure to manage the problem," Kaplan said in the press release. 

Dive Insight:

The new firm will operate as a separate, independent entity from the Closed Loop umbrella. It also has financial backing from multiple large corporations and nongovernmental organizations that sit on its steering committee, including 3M, Coca-Cola, Kimberly-Clark, Dow, PepsiCo, Partnerships in Environmental Management for the Seas of East Asia, Procter & Gamble, American Chemistry Council and the World Plastics Council.

Many of those countries first approached Closed Loop about potential investments in the ocean plastics issue more than a year ago, leading to the formation of Closed Loop Ocean. Though as Kaplan and his colleagues began to explore the investment pipeline, they realized the potential was bigger than expected and decided that a dedicated entity was required to give the issue full attention.

As countries in the region have experienced rapid development, waste infrastructure investment has lagged behind economic growth. Circulate Capital sees itself as a catalyst for more accessible financing to help modernize these systems. "Our firm isn't the only solution to ocean plastic, and we depend on enabling policies, regulatory environments, supply chains, and strong partnerships in the ecosystem. Our goal is to remove capital as a barrier," said Kaplan in the release. 

With signs that Chinese recycling companies are moving overseas as domestic supply chains for recycled plastics dry up, there could be new economic opportunities for nascent recyclers in many Southeast Asian nations. China still needs plastics in pellet form to feed its booming manufacturing industry, and the time could be right for underfunded companies in neighboring countries to get into the market early. China's 2017 import policies have only heightened this need as many Southeast Asian countries that also relied on its export markets have now become saturated with exported scrap themselves.