Apollo Global Management‘s Impact Mission Fund reached a final close of “approximately $1 billion” at the end of 2022, according to a source familiar with the fund.
When it started raising Impact Mission Fund in 2021, Apollo was following other mainstream private equity managers such as KKR and TPG in raising dedicated impact capital. It is Apollo’s first dedicated impact strategy and seeks to invest in later-stage companies “with a high degree of intentionality around impact”, Monta Ozolina, a principal in Apollo’s impact investing team, told New Private Markets last year.
The original target size for the fund was never disclosed, but press coverage had pegged it somewhere between $1 billion and $1.5 billion. The firm declined to comment on the fundraise or final close.
The fund includes both commitments from external LPs and capital provided by Apollo and its affiliates, NPM understands. External investors include Japan’s Norinchukin Bank, which invested ¥15 billion ($106 million; €98 million) in April 2022, and the New York State Common Retirement Fund, which committed $150 million in December 2021, according to NPM data.
The private markets fundraising environment has cooled significantly since the Impact Mission Fund was launched. Market volatility, the denominator effect and a slowdown in distributions back to LPs have all contributed to a sluggish market, bfinance’s Anna Morrison told NPM recently. Nevertheless, she expected generalist impact strategies, a category that would include Apollo’s, to fare relatively well in such an environment.
Since first starting to raise its Impact Mission Fund, Apollo has subsequently launched a sustainable investment platform to invest $100 billion in energy transition assets over the next decade. As part of this, the firm announced a $4 billion strategy to “to support corporates in their transition to clean energy” earlier this year. A green PE strategy is also in the works.
The Impact Mission Fund recently signed its fifth investment, acquiring United Living, a British company that builds and maintains social housing.
“What we found with United Living was a company that is a critical service provider in making sure that existing social housing is maintained, is fit for habitation and is getting the energy efficiency upgrades that are important to UK’s overall goals around emissions,” Joanna Reiss, co-lead of Apollo’s impact platform, told NPM following the recent deal. “Also, they’re a part of building more social housing, so they hit both sides of supply and maintenance.”
Other completed deals include: an investment in Reno De Medici, a Milan-listed producer of recycled cartonboard, in July 2021; and 1A Smart Start, one of the largest providers of vehicle ignition interlock devices, from private equity firm Abry Partners.
“We are over 50 percent deployed and continuing to look for opportunities, but there’s no rush. It’s more important to make the right investments than to make them fast,” Reiss said.