Goldman Sachs launches Horizon impact fund to address inequality

Goldman Sachs Asset Management has launched a social impact fund, Horizon Inclusive Growth I, New Private Markets has learned.

The fund sits within GSAM’s impact platform Horizon, which closed its Environment and Climate Solutions fund in January on $1.6 billion. 

The fund will focus on growth equity investments in three social impact sectors: education, healthcare and financial services, a source told NPM. It is headed by partner Greg Shell, who joined GSAM in 2022 from Bain Capital, where he was a managing director with the firm’s impact business.

The Horizon platform is led by Ken Pontarelli, GSAM’s head of sustainable investing for private markets, to whom Shell reports. 

GSAM declined to comment on fundraising matters. 

The news comes weeks after Shell delivered a rousing speech at New Private Markets’ Impact Investor North America Summit urging the impact investing community to its “higher calling”: to “spin off prosperity and improve standards of living for the broadest base of people”.

“For many decades, income, wealth, health and opportunity have become ever-more concentrated and predictable based on something as crude and simple as a zip code in which you are born. The wealth gap continues to expand. The core tenets of the American dream are increasingly untenable for most. 

“This level of inequality is negatively correlated with economic growth. Companies in the long run will grow more slowly without more prosperity and opportunity being driven outward.” 

There is more to be gained for impact investors than the satisfaction of supporting good causes, Shell emphasised. Enabling social mobility by improving access, affordability and quality of healthcare, education and financial services “to those that require it most” can deliver “premium investment returns”, he continued. “The commercial reasons here are as compelling as any that I can find in the market.” 

This is because of the sheer scale of demand – even in developed markets – for technologies, services and infrastructure that introduce efficiencies and reduce costs in these essential sectors. 

“Consider the demand for education and training globally, where companies are having a difficult time both hiring and retaining skilled talent,” said Shell. “Or consider what’s happening in the world of primary and secondary education. Schools and districts are increasingly incentivised to reduce learning loss and improve learning outcomes and it’s clear that schools and districts are turning to new and innovative solutions to help stem this trend.

“Or consider what’s happening across many themes in healthcare. Solutions that break down barriers to entry for high-quality care, such as virtual or highly effective local providers, can help drive significant cost savings for hospitals and payers, and drive improved health outcomes for patients.”

GSAM has been readying the inclusive growth strategy this year. In August, it recruited two managing directors to lead deployment activity from the strategy: Jamison Hill, who was previously partner at Base10 Ventures and a partner at Bain Capital Ventures, leads financial inclusion investments within the Horizon platform. Aurin Bhattacharjee, who was previously at software-focused growth equity firm DTCP, leads education and workforce enablement investments.