German insurance company Barmenia has appointed Schroders Capital to deploy €100 million for its first foray into impact investing.
Schroders will invest the capital over the next three years to create an impact portfolio classified under Article 9 of the Sustainable Finance Disclosures Regulation on behalf of Barmenia, which has a total investment portfolio worth €14 billion across public and private markets, according to a statement.
Most investments will be co-investments alongside private equity funds managed by Schroders and the firm’s impact investing vehicle, BlueOrchard, a source familiar with the transaction told New Private Markets.
Schroders will also make investments in sustainable infrastructure debt funds in developed and emerging markets, and a small amount will be allocated to third-party funds, the source said.
Barmenia is targeting a number of the UN’s sustainable development goals: clean water and sanitation (SDG 6); affordable and clean energy (SDG 7); industry, innovation and infrastructure (SDG 9); sustainable cities and communities (SDG 11); responsible consumption and production (SDG 12); and climate action (SDG 13).
“We are sustainable by conviction. We translate this focus into financing innovations and long-term investments in sustainable financial markets. We are very proud to have reached another milestone in our commitment to sustainability with our first impact mandate of this kind,” Barmenia chairman Andreas Eurich said.
In particular, Schroders is looking at private equity investments into providers of climate insurance – customised insurance products to protect micro-entrepreneurs and SMEs in emerging markets from the effects of climate change and to build climate resilience.
Many investors prefer establishing mandates with impact fund managers to deploy impact allocations rather than making individual investments into impact funds. Tikehau Capital disclosed a €100 million mandate by Dutch pension Pensioenfonds Detailhandel last month, while Blue Earth’s new chief executive Stephen Marquardt is planning to expand the firm’s mandates business.
“Asset owners are indeed seeking tailored portfolio solutions that reflect their specific sustainability and impact intents,” Maria Teresa Zappia, Schroders’ head of sustainability and impact, told New Private Markets. “They often seek bespoke investment solutions across a range of sectors, asset classes and themes to best align with their sustainability and impact objectives.”