UK asset mananger M&G has launched its first fund focusing on private and illiquid debt with the aim of achieving a positive social or environmental impact.
The £44.5 mln (€52 mln) M&G Impact Financing Fund has participated in several deals to date, such as lending to the developer behind the major regeneration of the Greenwich Peninsula in London (pictured), supporting solar power in the US and providing finance to UK housing associations.
M&G said that these deals will directly help build houses, provide employment and reduce CO2 emissions.
'Asset managers are playing an essential role in putting people’s savings to work in the economy to help create better futures for everyone,' said Anne Richards, chief executive, M&G. 'This fund is an opportunity for charities, pension funds and other like-minded investors to lend for impact by financing projects that benefit both the environment and society.'
M&G has worked with Sustainalytics, a leading independent provider of sustainability research, in order to devise a methodology to assess and measure the impact of the fund’s investments. M&G Prudential, Big Society Capital and The Swedish Foundation for Strategic Environmental Research are all seed investors in the fund.
'We are very excited M&G has launched this long term debt fund that puts social and environmental impact at its core and has great potential to scale and replicate,' said Evita Zanuso, financial sector & investor engagement director, Big Society Capital. 'That’s why we have invested £15 mln from our treasury portfolio as an early seed investor in this fund.'
'We are happy to partner with M&G on this fund given the strong alignment with sustainable development goals and the primary focus on investments which provide a positive and measurable impact,' said Åke Iverfeldt, CEO of The Swedish Foundation for Strategic Environmental Research (Mistra).
'Environmental and social considerations have long been integrated into our fixed income investment process but the philosophy behind this fund is to actively seek investments that will have a measurable positive impact.
'It is vital that investors can clearly see what their money is doing to improve people’s lives and the environment whilst providing stable financial returns,' concluded Richard Sherry, manager of the M&G Impact Financing Fund.