The company name is ONE CREATION Cooperative. The term “CREATION” is an acronym that stands for “Cooperative for Environmental Research and Application of Technologies Induced by the Natural Order”. In the questions below, the names “the Cooperative” or ONE CREATION are used.
What is a cooperative?
The cooperative is an economic entity based on the principle of cooperation serving the best interests of its members. It differs from a commercial company or a foundation by the rights of the members and the characteristics of the share capital. It is part of a solidarity economy or a dynamic of environmental and social transition.
What is sustainable development?
The widely accepted definition is that given by the United Nations Bruntland Report of 1987: “Sustainable development meets the needs of the present without compromising the ability of future generations to meet their own needs. It is generally recognized as having three fields of action: social, economic and environmental.
What is the purpose of ONE CREATION?
ONE CREATION’s structure, purpose and areas of interaction tend towards the pooling of resources to promote economic progress with respect for the environment and the changing needs of humanity.
Through its structure, which is open to all and egalitarian in its decision-making rights, the Cooperative proposes a citizen and democratic participation in the development of the societies in which it is active, and consequently also in the development of the economy as a whole.
ONE CREATION Cooperative is a company that offers an “instrument” dedicated to the investment community to support the rapid development of environmental technologies through a comprehensive multi-sector approach. This instrument is a means of financing the long-term support of companies in which participations have been considered, and of accompanying them in the achievement of a wide range of ecological, climatological and societal objectives of the sustainable economy. This instrument is a means to support the achievement of the objectives of the Paris COP21 agreement in the long term.
The Cooperative’s equity investments follow a unique concept, in the form of holdings in companies active in the field of environmental technologies and allowing for the development of ONE CREATION’s economic performance. It contains listed and unlisted assets. ONE CREATION can also guarantee the protection and transfer of these technologies. Investments in infrastructure allow for diversification of opportunities and the risk/return ratio of consolidated investments.
Why the environment?
In view of the social and economic changes in the world, two main sectors are already emerging as growth areas: the needs related to the retirement of the baby-boomers of the 1940s and more specifically the 1960s, and the environment. The former already has a good financial infrastructure. The environment, on the other hand, is a long-term growth sector with real potential both locally and globally.
What are environmental technologies?
These are the technical and industrial applications of advances in scientific research that can be expected to lead to improved well-being in relation to the natural environment and living beings, including human beings. The economic exploitation of these technologies seeks to reconcile the economic and environmental aspects of sustainable development. All opportunities that offer a concrete breakthrough, either widely available or with a high long-term impact index (agriculture, energy, high), are potential investments.
Is ONE CREATION a financial product?
No. ONE CREATION is a company incorporated under Swiss law in the form of an equity investment cooperative.
Why choose ONE CREATION rather than a financial product?
In a cooperative such as ONE CREATION, subscription to the share capital is in principle open to all. The investors are owners of the company in the same way as in a public limited company, since they own at least a share of the share capital. But they have an equal right in the general meeting to decide on the conduct of business, regardless of the size of their financial commitment. Since each vote has the same weight and each share the same maximum value, the management of the business is conducted in the interest of all for the continuity of the company in accordance with its social purpose.
How is ONE CREATION different from an existing financial product?
ONE CREATION is a cooperative. It is a very old legal form that defends the collective interest of its members. ONE CREATION is profiled in the field of environmental technologies according to its purpose. A financial product is not a company or an institution with legal personality. It is constituted by the contributions of investors who wish to make a collective investment. It is a contract; more precisely, it is a collective investment contract.
What technologies will ONE CREATION be involved in?
As the field of environmental technologies is virtually unlimited, ONE CREATION only engages in activities that are technically, environmentally and economically sustainable.
And this in the following themes:
- Renewable energy
- Ecological materials
- Sustainable mobility
- Waste management
- Environmental chemistry and biology
- Environmental consulting
- Energy efficiency
- Water management
What skills can ONE CREATION count on to be a leader in its field?
The ONE CREATION Cooperative brings together not only personalities in the social and scientific fields around its management, but also recognized know-how in the field of investment. It also relies on specific third-party skills to enable it to be at the cutting edge in its field. Thus, ONE CREATION can more quickly access the best authorized opinions in the field, particularly in the qualification of unlisted companies or those subject to doubt about the specificity of the technology.
What are the certifications of ONE CREATION?
The management of ONE CREATION is delegated to CONINCO Explorers in finance SA. The latter is certified ISO 9001, ISO 14001, which represents a commitment in terms of corporate governance. The ISO 14001 certification demonstrates the commitment to environmental protection. In addition, the management is a signatory of the PRI Principles for Responsible Investment which were established by the world’s leading investors with the support of the United Nations. However, ONE CREATION, like its management, has been certified B Corp, an international label that recognizes the level of sustainable commitment of the Cooperative.
Does ONE CREATION apply exclusive criteria for the selection of listed companies?
For companies considered as “Pure” or “Mix Player”, their activities must fall within the definition of environmental technologies used by ONE CREATION. The market capitalisation of some fifty listed companies in environmental technologies is around CHF 655 billion (2019). The potential for diversification remains high in a market that is buoyant in the short, medium and long term. And this is without considering the potential of unlisted companies and infrastructures.
For “Support” companies, part of their activities must also fit the definition and the sectors. In addition, if the main activity goes against the purpose of the environmental technology operated by the company, then the company will be excluded. For this purpose, various activities are excluded (oil exploitation, armaments, GMOs, etc.).
In addition, if the environmental benefits of the technology are not certain in the long term or the technology is currently controversial, then the company will be classified as “Controversial”. It will then be up to the Board of Directors to decide whether or not to take an equity stake in the company, in full knowledge of the facts.
What is ONE CREATION’s geographical investment universe?
Although the Cooperative is legally located in Switzerland, the aim from the outset was to have globally diversified holdings.
Why a cooperative rather than a BVG investment foundation (Swiss law)?
The investment foundation is a legal structure similar in form to an investment fund; this legal structure is specific to Switzerland and, consequently, restrictive in relation to the objectives of the Cooperative. A foundation is also restrictive for the development of ONE CREATION because it is only intended for institutions under Swiss law. The corporate purpose of ONE CREATION is neither linked to collective management nor to the private management of common assets. It is a company for long-term holdings and investments in sustainable infrastructure.
What law governs a cooperative?
Title 29 of the Swiss Code of Obligations (CO) is the legal basis for this. Otherwise, the law on public limited companies applies by analogy (Title 26, CO).
Who can become a partner of ONE CREATION?
Membership is open to all natural and legal persons, private individuals, commercial and non-profit companies, pension institutions and public communities. This is a non-exhaustive list of the various actors having the capacity to invest long-term capital.
How do you become a partner?
Any applicant acquires the status of associate by subscribing to at least one share of the share capital of ONE CREATION. He shall remain a partner for as long as he retains at least one share of the share capital.
Each request must be validated by the Board of Directors.
What are the subscription terms?
The issue price of a ONE CREATION share shall be CHF 10,000, subject to amendment of the Articles of Association. The minimum number of shares subscribed for per partner is one share and the maximum number is 10,000 shares. A federal stamp of 1% and an issuing commission of 2% are added to the price of each share subscribed. The use of the issuing commission is detailed in article 7 of the statutes.
Can institutional investors legally invest in ONE CREATION?
There are no restrictions for institutional investors in Switzerland or abroad. Subject to specific local provisions. In its development model, ONE CREATION applies a policy of acquiring holdings that respects the principles of appropriate risk spreading. The available funds for current management and the payment of a dividend are not speculated upon through an investment on the financial or capital markets. The participations are distributed among different categories of companies, regions and economic sectors.
ONE CREATION is an unlisted Swiss company of the “private investment” type and can be likened to a form of “structured product”, i.e. a specific investment alternative.
How can we ensure that cross-shareholdings do not create conflicts of interest within ONE CREATION?
Decisions of the General Assembly are taken by an absolute majority of votes, subject to special provisions in the Articles of Association. According to the Articles of Association, it is the responsibility of the General Meeting to elect the members of the Board of Directors and thus to guard against conflicts of interest within the Board. Since the decisions of the Board of Directors are made independently of management, it is up to the Board of Directors to decide whether there is a conflict of interest in its decisions, with the possibility of having to justify this to the General Meeting.
Is there a code of ethics for ONE CREATION?
The Management of ONE CREATION has a Code of Ethics applicable as a business partner of pension funds in Switzerland, which determines the highest requirements in this respect. The economic, environmental and good corporate governance standards it requires are applicable to the Cooperative, subject to any higher requirements desired by the Board of Directors.
What is the active management practiced by ONE CREATION?
The Cooperative acts as a holding company for the acquisition of shares in companies whose activities can have or have a positive impact on the environment. In this sense, the Cooperative is a company governed by articles 828 and following of the Code of Obligations. The said article 828 specifies that.
- A cooperative company is a company formed by a variable number of persons or commercial companies, organized corporately, and whose main purpose is to promote or guarantee, through joint action, the specific economic interests of its members.
- The formation of cooperative companies with predetermined capital is prohibited.
We are therefore not involved in an active management process such as that used for investments through investment funds, and a clear distinction must be made between equity investments in listed and non-listed companies. ONE CREATION’s social purpose underpins the long-term management of equity investments.
For listed companies, the focus is on economic entities that have demonstrated that over a given period, they have been able to generate stable to growing profits and that they are able to distribute a dividend and that their involvement in sustainable development, as measured by sales, will increase. There are no geographical or market capitalization restrictions, except that for reasons of risk management and the impact of stock market movements on assets and maintaining the long-term value of holdings, very strict criteria are applied to the monitoring and increase of holdings. Similarly, it is essential that the weight of each of the entities in the portfolio respects a relative ratio between the different holdings that is not dominant. A minimum level of 50% of the company’s assets at liquidation value is applied for this type of company. For unlisted companies, the Management targets entities at different stages of economic development. A reserve criterion is applied to the level of acquisition of each holding, i.e. a company that meets all the criteria of excellence may not exceed, at the time of acquisition, one-twentieth of the total corporate assets in liquidation value at the time of entry into the company. This implies that lower counter-values are applicable, which also diversifies the portfolio of holdings in unlisted companies. This also implies that ONE CREATION builds in its development of subsequent investment capacities in the same companies, depending on the arrival of new partners. For these companies, several highly diversified opportunities are under study and represent an extension of the economic sectors considered, as well as the number of equity investments, which reinforces the diversification of the total corporate assets and optimises the returns on investment.
As far as returns on investments are concerned, each investment has its own timetable for development, bearing in mind that the management is focusing on entities that will eventually generate dividends, without ruling out the possibility that some companies may be bought out or floated on the stock exchange, which will provide a significant improvement in the economic substance of the partners’ assets through their share(s).
At the request of the partners, certain criteria are put in place, including the level of latent reserves on listed securities, which must not exceed 25% of the share capital. Thus, each excess is adjusted and represents a potential for dividend payments, in addition to possible exits of holdings. Infrastructure remains a focus and projects may increasingly be considered as the share capital grows. Such investments offer a sensible diversification with a direct return and cash flow generation that optimizes current cash management.
What is ONE CREATION’s carbon footprint?
The annual report provides a detailed report on this point.
What does ONE CREATION invest in?
The objective is to obtain an even distribution between:
- Listed securities to enable us to take positions and engage in dialogue with major market players and develop long-term returns.
- Unlisted securities to formalize a stable to potentially increasing return and to be in the dynamics of the development of new technologies positively impacting the environment.
- Energy infrastructures are considered as well as farms could not be excluded. All of this generates total value for social capital development.
What are the selection criteria for the assets under consideration?
Specific criteria are assigned to each type of asset.
- For listed shares: on the one hand, sustainable financial stability of the company’s activities, as well as attractive returns and valuation. On the other hand, a qualified exposure to environmental technologies as defined by the qualification procedures.
- For unlisted assets: only companies with a part of their turnover in defined environmental technologies and with a demonstrated willingness to develop in line with the Cooperative’s aim are considered.
- For infrastructures, it will be mainly renewable energy production.
Why not focus on a single asset class?
In the unique field of environmental technologies, which is destined for long-term growth, the Cooperative wants to access all sources of economic growth related to income-distributing assets.
Since ONE CREATION’s aim is to encourage industrial economic performance in its field, it is logical that it diversifies its risk over various capitalizations while counting on the possible emergence of innovative companies with growth potential among all its holdings.
Since its launch in June 2010, the world has evolved and it has been demonstrated that both the cooperative model and the notion of environmental impact have become priorities.
As noted, ONE CREATION is a form of “structured product” that meets the challenges of the beginning of the third decile of the 21st century.
What are the decision-making powers of management?
The Management Board has only operational authority. It therefore has no decision-making power about strategy or acquisition of holdings. It applies the established procedures and, in this context, it may decide not to pursue an asset qualification if the criteria are not met. However, it informs the Board of Directors, which makes all final decisions.
What internal and external skills does ONE CREATION have to carry out its financing in unlisted assets?
The Cooperative ensures access to its needs by internalising professional skills when necessary. For unlisted assets, a dual structure is put in place. As unlisted companies are not subject to the same accounting disclosure requirements as listed companies, a financial and strategic review is carried out in addition to these instruments, using the analysis model. For these companies, the division of roles within ONE CREATION is clearly defined: external third parties validate the technology, while the financial and economic evaluation is carried out by a dedicated team within the Management, which validates the business plan. On this basis, the Board of Directors decides on the financial commitment. ONE CREATION representatives take a seat on the Board of Directors, or alternatively an observer role, for more strategic investments or to provide expertise to the invested company.
How to value unlisted assets?
Unlisted assets are valued using a specific method approved by the auditors.
Why invest in unlisted companies if there is no capital gain objective?
The long-term objective is to remain in the capital of the companies, provided that ONE CREATION’s share capital is not jeopardized. A large number of these companies will be acquired or listed in the future and the Cooperative will not be able to keep its share. The revenues generated will, at the current stage of decisions, be allocated for reinvestment and for income distribution. The capital gain realized in a profitable year is part of the distribution. In fact, capital gains are planned to be fully redistributed through the dividend to the Cooperative’s members.
What advantages does ONE CREATION have in supporting unlisted companies?
Its network of associates and business relations facilitates synergies between them but also outside. The Cooperative can seek out and recommend experts to accompany and advise these companies in their development as part of its capital participation. It can acquire patents and licenses or finance them, in exchange for their ownership rights. ONE CREATION’s commitment is not limited in time, provided that its purpose is respected. The more the share capital increases, the more reserves will be available, the more it will be possible to commit to promising companies. ONE CREATION’s market positioning means that we are in contact with hundreds of companies every year.
What are the advantages of a stake in ONE CREATION?
We list the nine main benefits below:
- To have a stable to increasing recurring economic return over time.
- To obtain stable capital in the medium and long term.
- Combining financial objectives and ethical convictions.
- Have a diversified portfolio of holdings.
- Participate in the development of cutting-edge companies that are not accessible on the stock market
- Promote interaction between the various economic players.
- To be a player in the positive evolution of environmental criteria.
- To have more than a right to vote as a partner: to share ideas, make proposals, etc.
- Become a committed investor with the ONE CREATION “label”.
What kind of network does ONE CREATION concentrate?
The main goal of the ONE CREATION Cooperative is to promote and guarantee, through joint action, the interests of its members in the development of technologies that ensure economic progress that respects the environment and civil society. To this end, it establishes business networks with both listed and unlisted companies linked to the field of environmental technologies, both in Switzerland and abroad.
How to assess the return on investment of ONE CREATION’s capital?
The dividend paid to the shareholders represents the return on investment. The surplus net profit can be fully redistributed, after constitution of the legal reserves according to the Code of Obligations. There is no inventory value, with the exception of an exit to be financed, and this insofar as the asset value does not cover the share capital. The share of a cooperative is always at its nominal value, subject to negative economic corrections.
Can ONE CREATION’s results be compared to a benchmark?
Not directly and this for several reasons:
- The results of ONE CREATION allow the payment or not of a dividend. The amount of the latter is decided by the partners.
- We are neither an investment fund nor a financial product, but a legal structure with a specific goal linked to sustainable industrial economic development.
- Dividends cannot be reinvested per unit as one unit is CHF 10’000.
It is still possible to make a rough comparative calculation, some of which are included in the annual report.
What information do the partners have access to?
In addition to ONE CREATION’s regular reports, the various shareholdings are accessible to the partners at any time on the Internet. In addition, specific information on the companies is available within the limits of the legal standards.
What are the risks associated with ONE CREATION’s activity?
The main risk is the evolution of the markets and its influence on the listed securities. Secondly, non-listed companies are always accompanied by a specific illiquidity risk, hence the term “venture capital”. Finally, there is a return risk if the selected equity investments do not provide the planned return on average.
How do you get out of unlisted projects that haven’t lived up to their promises?
If this were to happen, the acquisition value would be adjusted. A liquidation of the shareholding would be applicable if it was deemed to have no potential for recovery. In such a case, ONE CREATION would have to ensure a certain control over the patents, as much as possible to secure its investment in case of bankruptcy.
Can the equity investment be made for a public share buyout?
Theoretically yes. ONE CREATION has a philosophy of share retention. Within the limits of its means and policy, it could support a share buyback or a delisting of a listed company that lacks the necessary liquidity.
What would happen if all of ONE CREATION’s holdings lost a large part of their value at the same time and the related companies stopped paying their dividends?
The Cooperative would cease to distribute dividends as long as the results were not positive and the share capital was not reconstituted. The development over time has made it possible to build up latent reserves on both listed and unlisted securities. Either one or the other may disappear or be activated, but they cannot guarantee an absolute value of non-fluctuation below the nominal value.
Is there an agio to protect the partners’ assets against new contributions of funds?
No. Any investment is only made in order to achieve the Cooperative’s objective and to preserve the share capital. To this end, depending on the financial capacities available, ONE CREATION shall set up a risk coverage reserve. When the entire share capital is invested, the contribution of new funds enables the pursuit of the social goal and diversifies the risk associated with potentially dominant partners. The profits made are voted for redistribution as a 100% dividend, after allocation to the legal and statutory reserves.
How does ONE CREATION’s share capital take inflation into account?
The share capital is always CHF 10,000 or its equivalent in foreign currency at the time of conversion. The dividends that have been acquired have demonstrated a real added value in relation to inflation for Switzerland.
Who determines the precise strategic allocation of each asset class?
The policy of acquiring participations and the strategic allocation in the various stages of development and implementation are the responsibility of the Board of Directors of the Cooperative in dialogue with the Management and according to the development of the capital and the economic opportunities. There is no one optimal or ideal allocation. Depending on the economic situation, one or the other solution will be considered.
How will the risk of the share capital be covered?
The Cooperative is not an investment fund. It is a company for long-term investment, commitment and support. Therefore, a risk-hedging policy is not its aim. However, various measures are taken to ensure that participations do not become dominant. Depending on economic developments, one opportunity rather than another will be considered. There is also risk management through the creation of reserves, which allows risk to be taken. The contributions of new partners are used in these different perspectives of steering the development of the participations.
Can the share capital of ONE CREATION be closed?
By law, the share capital of a cooperative is open. Nevertheless, the Board of Directors decides whether new shares should be paid up and whether or not new members should be admitted.
What are liquidity and exit conditions of one or more partners?
The liquidity is high at 60% to 70% and can be realized within 48 hours. A partner may withdraw from the fund at any time, in whole or in part. The repayment of shares is defined by Article 9 of the Articles of Association, which states: “In the event of voluntary withdrawal or death, the Board of Directors shall decide on the value of the shares to be repaid. The calculation of the value shall be based on the net assets resulting from the balance sheet on the date of death or departure, excluding all reserves. However, the repayment may not exceed the total nominal value of the shares in question. The Board of Directors shall be entitled to defer any repayment for a maximum of three years if the Company has a deficit balance sheet or is in a difficult financial situation in view of commitments made or to be made. The right of the company to an equitable indemnity remains reserved. In the event of a request for withdrawal by many partners at the same time, paragraph 2 of Article 9 of the Articles of Association could apply.
What is the value of a share in the event of a partner leaving the company?
The calculation of the value of a unit is based on the net assets as shown on the balance sheet, excluding all reserves. The value may not, however, exceed the total nominal value of the outstanding units.
Balance sheet value: CHF 8’000.00
Legal reserve: CHF 50.00
Unrealized reserve: CHF 2’500.00
Exit value: CHF 8’000.00
Balance sheet value: CHF 12’000.00
Legal reserve: CHF 50.00
Unrealized reserve: CHF 2’500.00
Exit value : CHF 10’000.00
The value calculated as of 31st December of the exit year is valid for settlement after the General Meeting. In fact, the dividend remains the property of the outgoing partner and is recorded on 31st December of the reference year.
What are the fees applied?
- Subscription fee:
- Entry fee of 3% (1% federal stamp and 2% issuing commission). The latter rate may vary depending on whether an expected profit is known and to avoid a dilution effect on pre-existing partners.
- Operating costs:
- Operational management of CONINCO only on the share capital of 1.8%, administrative tasks of 0.3% and network management of development of the associates and the organization 2%.
- Fees and disbursements.
- Board of Directors’ fees.
- Interest and bank charges (including brokerage and securities deposit).
- Audit fees and related services.
- General Meeting expenses and various fees (lawyers, third party experts).
- Fiscal fees:
- Income tax.
The TER (1+2+3) is estimated at 3.5%. The TER of private equity investment funds, depending on the vintage and the structure (fund or fund of funds), is between 1% (structure in liquidation) and 12% (active fund of funds), and on average 6%. The Management of ONE CREATION does not apply any performance fees. The Cooperative recovers the VAT charged as an energy producer.
Why an ISIN code?
The ISIN code does not give the possibility to subscribe directly in an electronic way like all funds. Subscriptions can only be effective by submitting the subscription form in due form to the Management of ONE CREATION. The ISIN code allows the associate to communicate to his deposit bank the number of shares subscribed. The latter will thus have the possibility of having monthly valuations online according to the professional services that ensure the regular transmission of securities valuations, including Cooperative shares.
Who decides on the dividend payment?
In accordance with article 13, paragraph 4 of the articles of association, the dividend is decided by the General Meeting. This dividend is paid in cash into the account communicated by each shareholder. The dividend is payable within the period communicated after the General Meeting (April 2015).
How are dividends taxed?
The company is subject to the taxation of legal entities at its registered office and in the canton where it is established, according to the scale applicable on the reference date for the profit. The tax rate has been reduced significantly since the launch of the Cooperative, from 21.37% to 13.79%. The dividend paid is subject to withholding tax and is recoverable annually in Switzerland or in accordance with double taxation agreements outside Switzerland.
Can the dividend be reinvested?
The dividend can be reinvested, according to the decision of the associate, but as soon as it is due, by subscribing to new shares.