Sumitomo Mitsui Banking Corporation Invests $10 Million in Closed Loop Partners’ Circular Plastics Fund, Accelerating More Capital Toward Innovation and Infrastructure for Plastics Recovery and Recycling

NEW YORK, May 30, 2023 — Closed Loop Partners announced a $10 million investment in its Closed Loop Circular Plastics Fund from Japanese multinational banking and financial services institution Sumitomo Mitsui Banking Corporation (SMBC). The investment partnership aims to advance the recovery and recycling of rigid and flexible polyethylene (PE) and polypropylene (PP) plastics in the United States and Canada.

The Closed Loop Circular Plastics Fund is a key part of Closed Loop Partners’ broader strategy to reduce, reuse and recycle plastics in a circular economy. The fund focuses on PE, PP and flexible plastics––critical resin types that require additional investment to keep more material in circulation and help ensure that the industry’s demand for recycled material will be met. The fund provides catalytic debt and equity financing, spurring additional mainstream investments into recovery and recycling solutions and infrastructure that can help address bottlenecks in the recycling system. Fund performance is benchmarked according to a combination of financial and impact outcomes, including tons of PE and PP impacted, and tonnes of greenhouse gas emissions avoided or reduced.

With its investment, SMBC joins a group of leading corporate investors dedicated to the transition to a more circular economy for plastics, including Dow, LyondellBasell, NOVA Chemicals, Charter Next Generation, Chevron Phillips Chemical, SK geo centric Co. and SEE. This collaborative effort is key to advancing the recovery and recycling of plastics in the U.S. and Canada, at scale.

“SMBC is committed to sustainability, while identifying partnerships that leverage our expertise and strong footprint in the Japan and Asia Pacific region. Our team is proud to partner in the Closed Loop Circular Plastics Fund’s catalytic, impact-first effort to accelerate infrastructure, equipment, municipal services, as well as innovation and enabling technologies related to flexible films and specific plastic types,” said Masayuki Takanashi, Group Chief Sustainability Officer (CSuO) of Sumitomo Mitsui Financial Group, Inc. “Our commitment and partnership with Closed Loop Partners are part of SMBC’s steadfast commitment to our stakeholders, our local and international communities, the global environment, and the next generation.”

Since its launch in 2021, the Closed Loop Circular Plastics Fund has made several catalytic debt and equity investments to both private companies and public organizations, financing post-pilot scale projects that advance collection infrastructure, sortation capabilities, enabling technologies and re-manufacturing of PE and PP plastics, including:

• Equity investment in Greyparrot, a leading AI waste analytics platform that links to moving conveyor belts in sorting facilities to increase transparency and automation in recycling and help unlock the financial value of recycled materials;
• Loan to Myplas USA, a recycling company building a 170,000 square-foot plastic films recycling plant in Minnesota, aiming to process up to 45,000 tons of plastic waste annually at full capacity, diverting these valuable materials from landfill;
• Equity investment in Circular Services, the largest privately held recycling and reuse company in North America, including major municipal and commercial contracts;
• Follow-on loan to the Waste Commission of Scott County, a solid waste district in Iowa, to finance the purchase of new optical sorters for the county’s existing materials recovery facility.

Plastics recovery and recycling presents a significant economic opportunity, alongside the environmental upside of millions of tons of plastics diverted from landfills and the natural environment. Increasing plastics recovery, alongside material reduction solutions, scalable reuse systems and innovative new materials, can help meet an addressable market for plastics with potential revenue opportunities of $120 billion in the U.S. and Canada alone. With plastic waste expected to triple by 2060, the need for investments has grown even more urgent.

“The Closed Loop Circular Plastics Fund is a specialty strategy within our Closed Loop Infrastructure Group. SMBC joins our corporate partners, portfolio companies, subject matter experts and experienced Closed Loop Partners team to enhance the ecosystem effect that bolsters our private credit and equity solutions,” said Jennifer Louie, Head of the Closed Loop Infrastructure Group at Closed Loop Partners. “These solutions can help catalyze additional financial participation––accelerating the projects, infrastructure and innovations needed to close the loop on plastics.”

To date, Closed Loop Partners has kept 4.8 million tons of materials in circulation and contributed to the avoidance of 10.1 million tonnes of CO2e. The firm’s vision for a circular economy includes a circular future for plastics––one that reduces the need to extract virgin resources, harnesses design innovation and material science, and champions reuse models and new product delivery models. In the global transition to circularity, all sectors, industries and societies are needed to effect systemic change. Understanding these contributions to global supply chains is necessary, as investors, innovators and cities play key roles in advancing the solutions that can drive forward a global transition to a circular economy.

Interested in applying for financing from the Closed Loop Circular Plastics Fund? Learn more here.

SMBC is an investor in the Closed Loop Circular Plastics Fund. No material conflicts of interest are present as this entity did not receive any compensation for their comments.

About Closed Loop Partners

Closed Loop Partners is at the forefront of building the circular economy. The company is comprised of three key business segments. Closed Loop Capital Management manages venture capital, growth equity, buyout and catalytic private credit investment strategies on behalf of global corporations, financial institutions and family offices. The Center for the Circular Economy unites competitors and partners to tackle complex material challenges and implement systemic change to advance circularity. Circular Services employs innovative technology within reuse, recycling, remanufacturing and re-commerce solutions to improve regional economic and environmental outcomes, and build resilient systems that keep food & organics, textiles, electronics, packaging and more, in circulation and out of landfill or the natural environment. Closed Loop Partners is based in New York City and is a registered B Corp. For more information, please visit www.closedlooppartners.com.

About Sumitomo Mitsui Banking Corporation

SMBC is the commercial banking subsidiary of Sumitomo Mitsui Financial Group, Inc and one of the largest banks globally on the basis of total assets. It provides an extensive range of corporate and consumer banking services in Japan and globally.

About Sumitomo Mitsui Financial Group, Inc.

SMFG is one of the largest financial institutions headquartered in Japan, with an established presence across all consumer and corporate banking businesses. Through the subsidiaries and affiliates, SMFG offers a diverse range of financial services, including commercial banking, leasing, securities, credit card, consumer finance and other services. SMFG’s consolidated total assets were 264 trillion Yen as of December 31, 2022.

Disclaimer:

This publication is for informational purposes only, and nothing contained herein constitutes an offer to sell or a solicitation of an offer to buy any interest in any investment vehicle managed by Closed Loop Capital Management or any company in which Closed Loop Capital Management or its affiliates have invested. An offer or solicitation will be made only through a final private placement memorandum, subscription agreement and other related documents with respect to a particular investment opportunity and will be subject to the terms and conditions contained in such documents, including the qualifications necessary to become an investor. Closed Loop Capital Management does not utilize its website to provide investment or other advice, and nothing contained herein constitutes a comprehensive or complete statement of the matters discussed or the law relating thereto. Information provided reflects Closed Loop Capital Management’s views as of a particular time and are subject to change without notice. You should obtain relevant and specific professional advice before making any investment decision. Certain information on this Website may contain forward-looking statements, which are subject to risks and uncertainties and speak only as of the date on which they are made. The words “believe”, “expect”, “anticipate”, “optimistic”, “intend”, “aim”, “will” or similar expressions are intended to identify forward-looking statements. Closed Loop Capital Management undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Past performance is not indicative of future results; no representation is being made that any investment or transaction will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided.