Partners Group plans evergreen impact fund, as Life Impact II nears first close

Partners Group is planning its third impact fund, a multi-asset-class evergreen vehicle, New Private Markets has learned. It is also preparing to reach a first close on its second impact fund, PG Life II, sources told NPM.

Both funds are part of the Swiss-headquartered firm’s PG Life impact strategy, which addresses decarbonization, health and well-being and education. Partners Group declined to comment on any fundraising matters.

Partners Group is in the early stages of planning PG Life Evergreen, a source familiar with the strategy told NPM. Eighty percent of the fund will be allocated to private equity and infrastructure investments with a smaller allocation to private debt. Partners Group will target a net IRR of between 8 and 12 percent for PG Life Evergreen, a source said.

PG Life II has a €750 million target, a source familiar with the fund told NPM. Partners Group will announce a first close within the next two months at a figure less than €500 million, another source told NPM. It is an Article 8 fund under the SFDR. Life II is a private equity vehicle with a 90 percent allocation to buyouts and 10 percent allocation to opportunistic and growth investments, one of the sources said. It is targeting a net IRR of between 12 and 15 percent, a source said.

Partners Group was one of the earliest private equity giants to enter the impact space. PG Life I launched in March 2018, the same year KKR and Goldman Sachs brought their debut impact funds to market, and a year after Bain Capital and TPG launched impact funds. Partners Group had launched the debut fund with a $750 million target and a $1 billion hard-cap, but closed it at $500 million later the same year. Investors in PG Life I include pension funds Australian Ethical, which committed €5 million; Cassa Forense, which committed €40 million; and insurance company Norwegian Hull Club, according to NPM’s database.

The multi-asset-class approach of the evergreen fund is similar to Partners Group’s debut impact vehicle: PG Life I was marketed as having capacity to invest in private equity, private debt, infrastructure and real estate, with allocations of 75 percent for private equity and up to 25 percent for private debt, affiliate publication Private Equity International reported in 2018 (registration required). PG Life I is now around 80 percent invested, a source told NPM.

Several impact funds have taken a multi-asset-class strategy. Brookfield Asset Management’s Global Transition Fund invests in private equity and infrastructure; Just Climate, the climate-first platform established by Generation Investment Management, was set up to invest across venture capital, private equity and infrastructure. Schroders’ LTAF, Climate+, will have private equity, infrastructure, real estate and private debt allocations, while BlackRock’s “sustainability characteristics” LTAF – not an impact fund – will invest in both public and private funds across asset classes. Other examples include Bridges, Mirova and Aavishkar.