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Green building blocks Vancouver’s Tess Lawson is banking there is investor appetite for getting into local green construction projects
Mission: To build one of Canada’s first green income trust funds Assets: Extensive real estate industry experience and $250 million in green residential development projects to be financed Yield: A 12.48% return in its first year of operation
 By Andrew Petrozzi Real estate and best practices have long been on the mind of Evolution Fund founder and managing director Tess Lawson, 42, who has discovered “green” residential buildings can be an attractive investment option for those looking to include environmentally conscious construction projects in their portfolios. Lawson, who was born and raised in Vancouver, discovered the power of investing in real estate at an early age. She purchased her first home in Kelowna in 1991, and while bartending as a student in the Okanagan city, learned about equipment leasing during a random conversation. It was then that a light bulb went on that never went off, she said during an interview at the Evolution Fund’s new office near Granville Island. “That may have been a defining factor, but I was already taking accounting courses and I had already purchased my home,” said Lawson, smiling as she recalled when her curiosity about other people’s work saw her ask a lot of questions, a habit she continues with clients today. By 1994, she was in the equipment leasing business as a sole proprietorship. She owns and operates the Bailey Capital Fund, which provides equipment lease and financing for startup, expansion and development, as well as replacement, take-out and corporate acquisition of equipment or assets. She incorporated in 1997 and, in the same year, bought her second property in Kitsilano and turned her first home into a rental property. By 1999, she had begun her private leasing portfolio, and in 2001 purchased a third property, managing the previous two as rental properties. But by 2003 – her business impacted by fallout from the September 11, 2001, terrorist attacks – Lawson saw it was time to “reinvent” her work and began establishing an investment vehicle whereby private investors could invest in green residential construction projects that, in her mind, represented best practices. “We want to be efficient. We want to be more in harmony,” she said. “People have grown [used to] the word ‘green,’ but ultimately it comes from best practices as human beings.” Green building design represents best practices when it comes to residential construction, she said, and the investment fund she established with Evolution Fund CFO, trustee and managing director Michael Hines wanted to embrace such practices. “What we all decided was that if it was good enough for a Big Five bank in Canada, it should be OK for a group of investors for our fund. It’s the same product that is going to the banks, but now it is just going to a new home called the Evolution Fund.” The offering memorandum indicates the fund will do predominantly green or environmentally sensitive projects, according to Lawson. It has about $250 million in projects financed by partners who helped developed the Evolution Fund including the Streamline Group and James Schouw & Associates. “The projects came around first. The fund was built to help finance them,” she acknowledged. The Evolution Fund was established in March 2008 and last year delivered a return of 12.48%, according to its website. Hard work has been key to her success, and her business philosophy derives from her parents’ work ethic. “Pick yourself up from your mistakes,” she said. “That’s the tenacity – the determination to pick yourself up every time. One thing everyone has in common is that everyone makes mistakes. It’s how you pick yourself up and what you do with that mistake that makes the difference.” Learning to be responsible with success in good years will help prepare you for leaner ones, she advised. “Quiet your human cleverness and just go to work.” Building the fund has “truly been the PhD of my career,” she added. Lawson, who married in 2004, found that it helped stabilize her work-life balance, which as an entrepreneur had often leaned more toward work. “When you wake up in the morning, you look forward to going to work, and when your work is done, you look forward to going home,” she said. Outside of her work and home lives, she finds time to get involved in community and “plug in” to what’s going on. Whether it is through her previous involvement at the Vancouver Board of Trade or currently with the Rotary Club of Vancouver, Lawson loves educating people about finance, but cautions against letting legal and financial paperwork fall by the wayside. “Entrepreneurs and spirited people – and I tend to fall into that category – have great ideas and will run with them. As an entrepreneur, you don’t always necessarily have a partner with you. Be sure to spend your money on good service providers in the form of accountants and lawyers.” Spend time choosing someone who is right for you and your company. “You are the one creating the vision. You are the one out there doing the people thing. Let them do their jobs. If you try to pretend that you think you can do it, you are probably going to make a mistake.” Norman Tam, president of Tangram Developments Ltd., who has worked with Lawson for more than a decade, has found her to be “aggressive” in business. “She is very focused and she gets things done,” he said, adding the two share ideas and use each other as sounding boards. “Her Evolution Fund is amazing to me that she got it going. She has several other projects she is working on. … I’m watching her. She’s like a bulldog. Once she picks an item, she goes and gets it done. It’s a lot of work to get a fund going.” While Lawson acknowledges she does not have the skill to expertly manage the fund, the vision is in place, and she is happy to delegate. “If you want to start a fund, you have to do it for all the right reasons,” she said. “We saw a need in the eco-financing sector and thought it would be a good thing to build.” •
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Business in Vancouver April 21-27, 2009; issue 1017 Photograph: Richard Lam |
