Church of England, Merseyside and Manchester schemes back new impact investing fund

New Palatine private equity offering targets social/environmental impacts

A group of leading investors including the Church of England, the Greater Manchester Pension Fund and the Merseyside Pension Fund have backed a new impact investment fund from private equity firm Palatine.

Other investors in the Palatine Private Equity Impact Investing Fund LP, which has had a final close at £100m (€110.7m), include Robeco and the East Riding Pension Fund in northern England. Other investors include endowments, consultants, funds of funds and high net worth individuals.

The fund is managed by Palatine partner Beth Houghton, recipient of the award for outstanding individual contribution to responsible investment in private equity at last year’s BVCA (British Venture Capital Association) Responsible Investment Awards.

She heads a team of four including Zoe Clements (Partner), who joined Palatine from Electra Partners last year. Tim Farazmand, who chairs the BVCA’s Impact Investment Committee, is the fund’s chairman.

The fund is Palatine’s first to target a positive social and/or environmental impact alongside what it terms “industry-standard returns”.

The firm, which has a defined approach to responsible investment, is targeting small businesses on themes like integrated health, ethical consumerism, lifestyle and wellbeing and the circular economy. The first investment was in training provider Trade Skills 4U, which improves career opportunities for former military personnel.Houghton said Palatine has a “strong pipeline” of companies while Palatine Managing Partner Gary Tipper paid tribute to clients (known as Limited Partners, or LPs) with the “vision to support us in what is relatively virgin territory”.

“Our commitment to ESG and our focus on generating market rate returns was key in my view in attracting an impressive LP base for the fund.” Evercore Private Funds Group was the placement agent.

Elsewhere, Folksam Group has announced that it has acquired $350m of green bonds from the IFC, the private sector arm of the World Bank Group, in a private placement. “Thus, the target of SEK12bn is reached and a new goal of SEK25bn has been set,” said the Swedish mutually owned insurer asset manager.

And in further green bond news, Deutsche Kreditbank, which is part of Germany’s BayernLB, has said it is launching a new €500m Green Bond transaction following an inaugural transaction in June 2016.

The issue will be based on the new Green Bond Programme which was just recently launched. As before, the pool includes loans for wind and solar projects all across Germany comprising of almost 200 individual project financings amounting to around €900m. The second party opinion was created by oekom research.