Hunt Consolidated Inc.’s investment arm is making a push into “green” companies now that it has spun off an entity called Terra Verde Partners to help it find environmentally friendly firms with revenue between $5 million and $150 million.

With the spinout completed in late September, officials of Dallas-based Terra Verde are scouting North America on behalf of Hunt Investment Corp.

Terra Verde will consider businesses larger than $150 million in revenue if other like-minded investors are part of the transaction, company officials say.

Hunt Investment will get the first look at deals Terra Verde digs up, according to Chris Kleinert, president of Hunt Investment. If it opts not to invest, Terra Verde then will be free to take the deal to other potential investors. The principals of Terra Verde, managing partners Phil Arra and James Lee, say they also intend to their invest their own money into deals that Terra Verde puts together.

Hunt Investment’s role may involve anything from acquiring a controlling stake, such as through a leveraged buyout, or simply injecting capital into the deal. Terra Verde is looking to invest between $1 million and $15 million of its own money in addition to other commitments from investment groups. The amount of Hunt’s participation may vary, Terra Verde officials say.

Dallas-based Hunt Consolidated is a holding company with interests in energy, real estate and private equity with estimated revenue of $2.13 billion, according to the Dallas Business Journal’s Top 200 Private Companies list. Hunt Consolidated added Hunt Investment more than a decade ago to help diversify, and since then it has put money into dozens of companies nationwide, according to the Hunt Investment Web site. Hunt Investment has six private equity and venture capital units, according to Hunt Investment’s Web site.

“What they’re going to do is bring deals to us,” Kleinert said. “We’ll invest on our own account … If we opt to invest into that business, we’d do so from our own fund, rather than through Terra Verde.”

The move may seem a tad surprising for Hunt Consolidated, the holding company controlled by Dallas business icon Ray L. Hunt. Hunt’s father, H.L. Hunt, was a wildcatter who, according to published accounts, was once the world’s richest man. Ray Hunt is perhaps best known for making a large oil find in Yemen in the 1980s that helped add to the family fortune.

Kleinert says Hunt Investment’s interest in green companies began in 2007. That’s when one of Hunt Investment’s units, the Hunt Special Situations Group, paid $37.5 million to acquire from Republic Services (NYSE: RSG) a Dallas business now called Living Earth, which sells mulch, compost and other landscaping materials.

“Living Earth is the largest recycler of green material in the state of Texas, recycling more than half a million tons (of green materials”) on an annual basis,” Lee said. Living Earth’s employment levels vary depending on the season, but it has close to 250 people.

Living Earth has “been a home run,” Kleinert said. He added that Terra Verde’s managing partners, Arra and Lee, have done a “great job” of finding possible acquisitions for Living Earth or Terra Verde to do.

More money coming in

There may be as many as 200 private equity and venture capital firms nationwide that invest in the environmental sector in some fashion, according to Bryan Urban, managing partner of Dallas-based Silveron Capital Partners, a boutique investment banking firm that specializes in renewable and alternative energy. Of that group, perhaps 50 or so specialize in it.

“There has been a significant influx of capital for the industry as a whole, both from early stage companies and more traditional renewable energy companies,” he said.

On the venture capital side of green investing, funds may be $50 million in size, while for more traditional private equity firms, funds could be anywhere from $500 million to $3 billion, he said.

“I don’t believe it’s overcrowded,” he said of the growing investment interest in all things green. “I believe there will be significant opportunities in the space, predominately because it requires so much capital.”

People in the investment industry say they’re not aware of any other shops in North Texas other than Terra Verde that specialize in green investing.

“This is the first (firm) that I’ve heard about in Dallas that is doing it,” said Arthur Hollingsworth, managing partner of Lone Star Investment Advisors LLC, an area private equity firm.