North Sky Capital, which manages a series of impact secondaries funds, has hired a European managing director to help it capitalise on an expected boom in impact secondaries.
“We think 2023 is going to be a boom year for secondaries investors generally, and impact secondaries specifically,” Scott Barrington, founder of North Sky, told New Private Markets, “because so many institutions are going through a denominator effect problem where stocks and bonds have fallen [in value] over 2022 and – given their allocation policies – [institutions] are currently overallocated to private equity. Which means there is going to be a lot of selling activity.”
“We’ve already seen a lot of that, and we have a robust pipeline of opportunities we are working on right now; we expect that’s just going to continue and probably get bigger as 2023 goes on,” said Barrington.
In order to build capacity in Europe, North Sky has hired sustainable investment veteran Stefan den Doelder from Stafford Capital Partners. Den Doelder has spent the last two and a half years as a partner and member of Stafford’s investment committee, responsible for $1 billion in sustainable and impact private equity funds and co-investments. He has been involved in sustainable private equity investment since 2006, with multiple stints at both Robeco and Stafford.
Den Doelder told New Private Markets he was making the move to North Sky for two reasons: “One is that secondaries are very attractive in the coming years, and definitely impact secondaries. Two is that North Sky, as a specialised firm, is well placed to capitalise on that.”
North Sky was a pioneer of the impact-focused secondaries space; it raised its first vehicle in 2013. It is currently raising Fund VI, having fully invested its $220 million fifth fund. The firm declined to comment on fundraising activity, but according to PEI Group data, it is targeting $350 million for Fund VI.
A private fund secondaries market grows in the wake of a booming primary fundraising market. The explosive growth in primary fundraising for impact investment of the last few years bodes well for those in a position to provide liquidity to investors.
North Sky’s impact secondaries business has historically been a global one, Barrington told New Private Markets, so the addition of den Doelder and any future European recruits will expand the firm’s capacity (both for dealmaking and fundraising) but will not change the geographic profile of the fund programme.
“While we have been investing worldwide since 2004, Stefan will enhance our coverage of developed markets outside of North America, in particular the UK, Europe and Israel, said Tom Jorgensen, co-head of impact secondaries at the firm, in a press release. “North Sky intends to hire additional employees to support the firm’s global investment strategy.”
Separately North Sky manages a series of North America-focused infrastructure funds.