CACEIS provides specialised services to carbon funds which invest in projects implemented under the Clean Development Mechanism of the Kyoto Protocol.

 
CUSTOMIZED SERVICES
Servicing needs for funds specialising in carbon assets are similar to those of Private Equity, in that they are difficult to standardise and require customisation at every step. Asset pricing is a complex business requiring considerable expertise, as there is both a fixed and variable portion of a fund's portfolio. Funds can hold fixed non-listed assets (guaranteed carbon credits purchased on the secondary carbon market, and non-guaranteed assets originated from sustainable development projects), and variable off balance sheet OTC contracts called Emission Reduction Purchase Agreements (ERPA). Specially designed systems and experienced staff are an essential part of an effective pricing service.

 
CUSTODY SERVICES FOR ATYPICAL ASSETS
In terms of custody services, unlike traditional assets, CERs are not held by the custodian but instead by the registries. The custodian's role is to track the carbon credits issuing from projects, by interfacing with the national and international carbon registries, ensuring bookkeeping and supervision duties on each project's account. The custodian ensures that the correct number of CERs are delivered when expected, and that the project receives prompt payment against these deliveries. As regards domiciliary services, Carbon funds are usually closed-end funds with a limited number of prestige investors, so arranging physical board meetings and AGMs involving all investors is the norm.
 
Through the specialised alternative investment servicing team in Luxembourg, CACEIS provides these and many more services to Europe's first non-governmental carbon fund, launched in 2005.