Palatine launches second impact fund

Palatine Private Equity has launched its second impact fund.

The Manchester-based private equity firm has registered Palatine Impact Fund II LP as a private fund limited partnership with Companies House England and Wales. Palatine declined to comment on the fund launch, its target size or returns target.

Palatine is investing its first impact fund, which closed in 2017 at £100 million ($135 million; €117 million). The fund is headed by partner Beth Houghton and invests £5 million to £10 million in companies creating “a clear positive impact on society or the environment”, according to the firm’s website.

The first fund had made eight investments by May 2021, primarily in the health and education sectors, Houghton told PEI Media’s Impact Investor Forum. Recent investments include Anthesis, a sustainability consultancy, and Back2Work, a company providing skills training for unemployed individuals. “We want to beat market rate returns,” Houghton added.

Investors in the first impact fund included asset manager Robeco, fund of funds manager Adams Street and public pensions for East Riding of Yorkshire County Council, Greater Manchester, Merseyside, the Environment Agency and Railpen. Palatine used New York-based placement agent Evercore to raise Fund 1.

Palatine sets impact performance targets for each investment and reports on these “on a quarterly and annual basis”, Houghton told the Impact Investor Forum. “And if we raise Fund II, we’ll do that for the second fund as well,” she added.