Impact 30: The investors behind the funds

Investors in the Impact 30’s funds include greater proportions of North American and African LPs and corporates than last year’s inaugural Impact 20, New Private Markets’ research finds.

There are 203 limited partners known and 293 individual fund commitments behind the funds in our list of the 30 biggest impact fund managers. This list of known investors, measured by by capital raised over the last five years, has more than doubled in length since 2021’s inaugural Impact 20, as we have added more managers to the list and larger funds have been raised.

Thirty of these LPs (15 percent) are corporates, in a contrast with 2021’s Impact 20, which had 95 known LPs, none of which were corporates. Why? 2022’s Impact 30 contains more climate funds than our first list, and corporates have shown increasing interest in venture-stage climate technology funds as strategic investments. For example, all known investors in Energy Impact Partners’ $1 billion climate technology fund are corporates, as are the investors behind the Oil and Gas Climate Initiative’s $1 billion debut fund. Both EIP and OGCI are new entrants to the Impact 30 list this year.

The past year has also seen an increase in the proportion of North American and African LPs among the Impact 30 funds’ investors. A total of 123 (61 percent) of these investors are headquartered in North America, up from 49 percent of LPs in 2021’s Impact 20. Five African investors have backed Impact 30 funds, up from just one African investor backing an Impact 20 fund.

How globalised are funds’ investor bases? Less than half of the commitments Impact 30 fund managers received were from “domestic LPs” – LPs headquartered in the same country as the fund manager. But it is a different story for US-headquartered impact fund managers, who appear to focus on the domestic LP market: 91 of the 111 commitments to US-headquartered fund managers (82 percent) were from US-headquartered LPs. All known LPs in Vision Ridge, North Sky Capital and Renewable Resources Group’s impact funds are American, for example.

Overall, investors’ appetites for larger ticket sizes have grown in the past year. Of particular note was the New York State Common Retirement Fund’s $750 million commitment to Brookfield’s Global Transition Fund – the largest ever third-party investment in an impact fund that New Private Markets has seen.

The five biggest commitments in last year’s Impact 20 funds ranged from $200 million to $400 million; the five largest commitments in the Impact 30 range from $300 million to $750 million. This is not surprising, given the entry into the list of climate mega-funds by asset management giants – but the market is likely to see more LP commitments of these sizes as fundraising targets for such funds increase.