The inaugural Impact 20 ranking maps the 20 largest managers of impact capital in private markets based on funds raised. What it does not do is look into the future.
A glance across the market at the managers currently raising capital suggests that, when we come to revisit this ranking, it will look starkly different. Here are the movers and shakers that we anticipate making a splash in the next iteration of the Impact 20.
- Listed alternatives giant Brookfield Asset Management is, according to information from its latest earnings call, nearing a first close on its giant Global Transition Fund, its first dedicated impact investment fund. The fund has a $7.5 billion target and Brookfield’s GP commitment alone, at $2 billion, would put the firm in the today’s top five.
- News first emerged in August 2019 that Apollo Global Management was seeking $1 billion for its first impact fund. We have since learned more about its strategy, which represents a departure from the impact investing norm by targeting later stage businesses in what Marc Becker, co-lead of the impact unit, described as “not a purist” approach to impact.
- BlackRock, the world’s largest asset manager, has been a vocal advocate for sustainable investment strategies and has increasingly been embracing private markets. This year it signed a deal with Singaporean investment fund Temasek to launch Decarbonization Partners, a series of late-stage venture capital and early growth private equity funds. The venture is seeking $1 billion for its debut fund, including $600 million from BlackRock and Temasek collectively. The firm will not stop there: in June the firm registered BlackRock Private Equity Impact Capital with regulators in Luxembourg.
- Climate Adaptive Infrastructure was launched in 2019 by Bill Green, a veteran of Macquarie’s infrastructure group. He founded the firm to make investments that reduce the carbon emissions of infrastructure at the construction stage or early in an asset’s lifespan. In May New Private Markets reported that CAI had collected nearly a quarter of the $1 billion fundraising target for its first fund and was eyeing a final close within six to nine months.
- Apax Partners is a stalwart of European private equity and the 21st largest private equity firm in the world, according to the affiliate title Private Equity International, and it is plotting a move into impact investing. We know that the firm has hired Alykhan Nathoo, formerly a partner at Helios Investment Partners, to co-lead the formation of a global impact fund. What we don’t know is how much they are planning to raise.
- Goldman Sachs brought veteran Ken Pontarelli out of retirement last year to establish its new Sustainable Investing Group. It put a target of $1 billion on the cover of its debut impact fund. It has already raised more than $800 million for the Horizon Environment and Climate Solutions Fund, and it looks likely to bust through its target, propelling the bank into the next Impact 20.
It won’t just be new arrivals that reshape our ranking. Existing Impact 20 firms look likely to either upset the order or fend off the competition.
- KKR is already at number five by virtue of its $1.3 billion 2018 debut impact fund. Last week we broke the news that it is in the market with the successor fund. We don’t know what the target is, but it’s safe bet to assume it will be larger than Fund 1.
- TPG, currently at number two, will not give up its position lightly. The firm is currently marketing its first climate specific Rise-branded impact fund with a fundraising target of $5 billion.
- Leapfrog is already among the largest pure-play “profit with purpose” managers in the business. Not counted in the numbers for this years ranking is $500 million in capital committed by new minority owner Temasek which will cornestone the firm’s future funds.
Who else is waiting in the wings? Email me at firstname.lastname@example.org.
Photo collage (from left): Lisa Hall, Apollo Global Management; Connor Tesky, Brookfield Asset Management; Teresa O’Flynn, BlackRock; Ken Pontarelli, Goldman Sachs.