What’s EQT got cooking?
In a conversation about scaling up impact investment, Anders Misund, partner and head of Nordics for EQT, dropped a tantalising hint. “The firm has had a lot of debate about whether to launch an impact strategy and we were mindful we did not want to have a small impact strategy on the side,” he said. But, he continued: “We… want to do [impact] slightly differently, at scale, and within the framework of how we work at EQT… that’s what we are going to talk more about in a couple of weeks.” We look forward to learning more.
Lessons from a global crisis
She may have stepped down from her temporary role as chair of the UK Vaccine Taskforce, but Kate Bingham is still getting calls from governments around the world to get her views on how to take forward covid-19 vaccination efforts. Bingham, whose day job is managing partner of a healthcare VC firm, talked delegates through how the VC approach was applied to the task of acquiring and manufacturing vaccinations on a massive scale in an unthinkable timeframe. When asked what learnings she took from her stint on the vaccine taskforce back to SV Health Investors, one was a reinforced appreciation for diverse viewpoints around the table in terms of gender, socio-economic background and nationality: “not people that have all got very cookie-cutter equivalent backgrounds where they think the same thing. You really want diversity of thought”.
The great data convergence
When it comes to the old “we need impact data standardisation” refrain, it feels like there is progress. The International Finance Corporation’s chief thought leadership officer Neil Gregory told delegates that “there’s a great amount of convergence now around reporting and using the same metrics”, and that a survey they conducted among their co-investors showed two-thirds of them use one of two impact indicator sets – either the IRIS+ dataset, which is managed by the GIIN, or the HIPSO indicator, which is managed by the IFC with other DFIs. “These two data sets are over 90 percent aligned, so there’s actually a lot of commonality,” he said.
The carry question’s coming
A rash of ESG-linked subscription facilities “has to be proof that impact can be quantified and then translated into a financial or economic impact”, said Kirkland & Ellis partner Amala Ejikeme. Linking carried interest to impact performance in some way is coming, he continued, but “it’s a moveable feast” with “more questions than answers”. “The big questions are ‘how?’, ‘when?’, and ‘who calculates all of this?’, because it has the inherent potential for massive conflicts of interest if the GP is essentially marking its own work.”
Bain Capital Double Impact’s year in review document (published yesterday) features a familiar face. Former Massachusetts governor Deval Patrick, who was previously managing partner of the Bain Capital impact unit, has been signed up to sit on an external advisory council. He left the firm in November 2019 to launch a United States presidential bid. More details here.
AXA Investment Managers raised around $260 million for private markets impact investment in 2020, according to data in its annual review. The firm now manages circa $900 million, after growing AUM by 40 percent last year, it said. Last year the firm launched a fund focused on financial inclusion and global health.
PE job creator
Private equity portfolio companies grew by 254,157 workers in Europe in 2019, according to data just released by InvestEurope, the European private capital industry association. By the end of 2019, there were 23,009 portfolio companies employing 10.2 million workers in Europe. Jobs grew by 5.5 percent in PE-backed companies, compared with 0.9 percent job growth across Europe as a whole.
European private equity firm Astorg has completed a “€1 billion-plus” financing to acquire Corialis, which makes aluminium systems for windows and doors, from CVC. The financing is an “ESG-linked syndicated term loan B”. Says the firm: “The assessment of Corialis’ ESG performance will be monitored and externally verified by a third-party sustainability rating and associated annual targets over the life of the financing. The ESG ratings over
the next years will determine a premium or discount on the margin of the debt and provide a financial incentive to achieve the ESG goals.” Press release here.
Nordic private equity firm Polaris has appointed an internal candidate to the role of head of sustainability. Martin Bang-Löwgren has been with the firm’s investment team since 2009.