PG Impact Investments, an impact firm founded by Partners Group chiefs, has launched a ‘market-rate returns’ private equity impact fund. This is the first time the firm – which is a separate entity from Partners Group – has sought to raise third-party capital for a private equity fund. It has also hired Kayode Akinola, previously a director at KKR, to lead its direct private equity practice and join the executive committee.
PGII was founded by Partners Group co-founders Urs Wietlisbach and Alfred Gantner, and Peter Wuffli, then chairman of Partners Group, in 2015 to invest in social impact funds in Africa and India.
Urs Wietlisbach’s charitable foundation has committed $50 million as an anchor investor in the new fund. Returns “will be comparable to private equity funds that may not be looking at impact,” Akinola told New Private Markets. “It’s not concessionary capital.”
He declined to be more specific, saying instead: “It’s always difficult to give a number, but it’s a market-based return. A transaction needs to have an attractive return profile and commensurate impact. If we see something that has fantastic impact but generates no return for our investors, we won’t do it.”
The fund will make growth equity investments sourced via offices in London, New York and Singapore and will be supported by a total of 11 investment professionals at final close, the firm said in a statement.
Akinola has spent time at Investcorp, Helios Investment Partners and latterly was a director at KKR. In 2017 he left KKR and reportedly told Reuters he was setting up a private equity firm called Arkana Partners in partnership with Marlon Chigwende, former Africa head at Carlyle.
Akinola told New Private Markets: “Marlon Chigwende and myself briefly looked at setting up a mid-market private equity firm just after I left KKR. It was a discussion that we had, but we never actually went ahead and did that. I was taking some time off and investing privately whilst I was figuring out what I wanted to do next.”
The new fund will invest in climate solutions companies in North America, Europe and South-East Asia, in sectors such as the energy transition, electrification, optimising industrial processes and the circular economy.
“A business that helps reduce the amount of waste that goes into landfill by improving sorting technology when the waste leaves the home is a good example of what we would look at,” said Akinola.
PGII is targeting “professional, ultra-high net worth offices, family offices and institutional clients” as investors, said CEO Urs Baumann. Akinola added that its ideal investors would be “high-quality investors who can bring more than capital, who might have industry insights, who might have connectivity”.
PGII has used the founders’ capital for previous direct debt and fund investments with a social impact focus, but this will be its first attempt to raise and manage external capital.
Akinola has brought two further hires to PGII to work on the CGF: New York-based Benjamin Hogan, previously a director at Inherent Group, and London-based Claude Kamga, previously a director at Wendel Group and an associate at KKR. Akinola describes them as “highly seasoned growth equity investors who have been successful in both developed and emerging markets”.