financial returns

BMO targets 15% IRR for private markets impact debut

Terms, conditions and strategy information for the first private markets impact fund for BMO GAM.

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BMO Global Asset Management has launched its debut private equity impact fund, Castle Mount Impact Partners, targeting €200 million. The firm is targeting a 15 percent net internal rate of return, according to a fund marketing document.

BMO GAM is a London-headquartered asset manager with $273 billion in managed assets. It focuses on listed funds and has a 3.5 percent allocation to alternative markets, according to PEI Media’s database. In the public markets, BMO GAM has an impact vehicle and eight responsible investment funds. New Private Markets has more details about the fund:

Strategy: Co-investments with impact fund managers and generalist private equity managers. BMO GAM is aiming for 15 to 20 companies in the CMIP portfolio, “predominantly in Western economies”, according to a report on Citywire.

Target size: €200 million.

Returns target: 15 percent net IRR.

Management fee: 1 percent of net asset value, plus 0.5 percent of undrawn commitments during investment period.

Carried interest: 10 percent, with an 8 percent hurdle rate.

Minimum commitment: €1 million.

Fund life: 10 years, extendable by up to three years.

Target market: Buyouts and growth equity in the lower mid-market, with an enterprise value under €500 million.

Geographic focus: Global remit, with a focus on western economies.

Impact goals: Investing in products and services that contribute to achieving the UN’s sustainable development goals along three themes and several sub-themes:

  • Environmental sustainability: climate change mitigation, pollution reduction, clean energy, sustainable agriculture and food, resource efficiency and the circular economy.
  • Health and wellbeing: wellbeing and prevention, curative medicine, rehabilitation, palliative care, mental health.
  • Equality and inclusion: access to finance and technology, safe working environment, quality education, affordable housing, cybersecurity.

Responsible investment associations: PRI signatory (2015); Net Zero Members Alliance (part of the GFANZ network); initiative Climat International.