Private Equity

Private Equity Impact Investments

Impact Capital Partners is a U.S. based placement agent for impact investments. Take a look at our sustainable Private Equity strategies!

What is Impact Investing?

Impact Investments are investments made in social enterprises or investment funds that seek to generate positive social and/or environmental impact alongside a financial return. As opposed to SRI and ESG investing, which rely on exclusionary practices to screen out harmful investments, impact investing aims to bridge the altruistic principles of philanthropy with traditional investing. 

Depending on the strategic goals of the investor, impact investments can be made in frontier, emerging or developed markets, and can target a range of financial returns from commercial (“market”) returns to concessional (“below-market”) returns. Impact investments can also be made through various asset classes, and can focus on varying impact themes. For example, BlueOrchard – which works to tackle climate change and global inequality through its impact investments – launched its inaugural financial inclusion private equity fund in May this year (2022).

Impact investing appeals to a variety of investors because it balances commerce and compassion. It also offers a broad range of options, with varying levels of focus on impact vs financial returns. Some strategies emphasize financial return while still seeking to benefit society. Other approaches put social impact first, accepting returns that vary from below-market rate to a simple repayment of principal (source).

According to the Global Impact Investing Network’s October 2022 report, the impact investing market currently exceeds $1.16 trillion in assets under management. In April 2019, GIIN estimated the market size at $502 billion and by 2020 that estimate had grown to $715 billion.

What is Private Equity?

Private equity as an asset class describes investment partnerships that buy and manage companies before selling them. Private equity firms operate these investment funds on behalf of institutional and accredited investors.

Private equity funds may acquire private companies or public ones in their entirety, or invest in such buyouts as part of a consortium. They typically do not hold stakes in companies that remain listed on a stock exchange.

Once private equity firms acquire a company, they encourage executives to make the company operate more efficiently before selling — or “exiting” — several years later, either through a sale to another investor or through an initial public offering.

Private equity funds are usually backed by investments from large institutional investors like pension funds, sovereign wealth funds, endowments, and very wealthy individuals. Private equity firms run these funds with money from investors and money they borrow. Today, private equity firms control more than $6 trillion in assets in the U.S. Some of the largest players in the space include Bain Capital, Apollo Global Management, TPG, KKR and Blackstone.

What are Private Equity Impact Investments?

As you can probably guess by now, private equity impact investments are investments made by private equity funds to acquire and/or reorganize businesses to achieve a financial return for investors while generating some measurable positive social and/or environmental impact. 

As investors’ appetite for impact grows, more and more pressure is being placed on private equity funds to take ESG considerations into account when making investment decisions. According to the 2019 Asia-Pacific Private Equity Survey by Bain, 60% of Asia-Pacific-focused general partners (GPs) feel increased pressure from their investors to focus more on ESG.

What used to be the territory of core impact investors like Bamboo Capital Partners or LeapFrog Investments is now attracting some of the biggest PE funds, like TPG, KKR, and Bain Capital. TPG’s $2 billion Rise Fund 1 was the largest pool of capital dedicated to social and environmental impact when it closed in 2017. KKR is trying to raise money for a $1 billion Global Impact Fund, and India is one of the main places where investments will be made. Impact investing is still a small part of raising money as a whole, but it is growing and will continue to account for larger allocations in the future.

Our Private Equity Impact Investments

At Impact Capital Partners, we are constantly looking for institutional-grade impact investing opportunities across various sectors, geographies, asset classes and impact themes. Below you can browse our latest private equity impact investing offerings. 

Institutional financial professionals can register for free here to access sponsor names, deal terms, decks and more.

This PE strategy is buying established Agri-industrial and Agri-processing businesses that have been identified as turnaround opportunities. It will de-risk the project finance transactions upfront by buying the debt at a discounted price with the objective to turnaround the businesses so that they are able to maximize their potential.
With anchor funding and first-loss coverage from the Green Climate Fund (GCF), the world’s largest climate fund, the goal of this Blended Finance Climate Strategy is to catalyze long-term climate investment at the sub-national level for mitigation and adaptation solutions through a transformative financing model (20% public / 80% private). The strategy's Global’s business model is designed to attract primarily private institutional investment and to deliver certified climate and Sustainable Development impacts and Nature-based Solutions at global scale (SDGs, NbS).

About Impact Capital Partners

At Impact Capital Partners, our mission is to connect institutional capital with the growing impact investment market to address the world’s most pressing challenges. By utilizing impact investments, institutional investors are able to generate positive, measurable social and environmental impact alongside a financial return. We are constantly finding new impact investment opportunities in both emerging and developed markets, targeting market-rate returns. Schedule a call with us HERE if you’re interested in learning more about our impact opportunities.

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