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Golding enters impact market with €300 million global private equity fund

Photo: Jeremy Golding, foun­der and mana­ging direc­tor of Golding Capital
1. Octo­ber 2021

Munich — Golding Capi­tal Part­ners is pushing ahead with the stra­te­gic expan­sion of its own impact divi­sion and is laun­ching its first insti­tu­tio­nal impact fund of funds. With “Golding Impact 2021”, the Munich-based asset mana­ger is pursuing a globally orien­ted private equity impact invest­ment stra­tegy with ambi­tious and concretely measura­ble envi­ron­men­tal and social sustaina­bi­lity goals that are closely linked.

The new fund focu­ses on compa­nies in Europe, North America and emer­ging markets with trans­for­ma­tive busi­ness models in rene­wa­ble energy and resource effi­ci­en­cies (35 percent), sustainable agri­cul­tu­ral tech­no­logy (35 percent), and finan­cial services and other sustainable sectors (30 percent). Golding fore­casts a net IRR of 12 to 14 percent and plans a fund volume of 300 million euros. The Munich-based asset mana­ger initi­ally clas­si­fies the new impact fund conser­va­tively under Arti­cle 8+ (“light green plus”) in accordance with the Sustainable Finance Disclo­sure Regu­la­tion (SFDR), but aims to clas­sify it as an Arti­cle 9 fund (“dark green”) in the long term.

“Impact inves­ting is not only the future, but already offers tremen­dous oppor­tu­nities for insti­tu­tio­nal inves­tors. Our invest­ment decisi­ons can create real, sustainable change in a global trans­for­ma­tion process while crea­ting tremen­dous value to gene­rate adequate returns. The biggest chal­lenge here is access to the best target fund part­ners while main­tai­ning diver­si­fi­ca­tion. Based on our long-stan­­ding impact track record, we believe we can make an important contri­bu­tion to achie­ving the United Nati­ons deve­lo­p­ment goals toge­ther with our inves­tors,” comments Dr. Andreas Nils­son, Mana­ging Direc­tor and Head of Impact at Golding.

“To do this, we create a hand­pi­cked fund port­fo­lio for our inves­tors consis­ting of invest­ments in compa­nies with envi­ron­men­tal or social charac­te­ris­tics as well as sustainable growth. These invest­ments must meet agreed-upon impact goals from day one. Since we place great empha­sis on ensu­ring that repor­ting for port­fo­lio compa­nies in non-Euro­­pean coun­tries meets 100% SFDR stan­dards, we start conser­va­tively under Arti­cle 8+ and see oursel­ves as ‘light green plus’. With our target funds, we will actively work on uniform data collec­tion and rota­tio­nal repor­ting to achieve Arti­cle 9 status,” adds Mana­ging Direc­tor Huber­tus Theile-Ochel.

Jeremy Golding (pictu­red), foun­der and mana­ging direc­tor of Golding Capi­tal, comments, “For us, the first impact fund is the logi­cal evolu­tion and prac­ti­cal imple­men­ta­tion of our long-stan­­ding sustaina­bi­lity philo­so­phy. Since 2013, we have been a signa­tory to the UN PRI and will soon also be a signa­tory to the Opera­ting Princi­ples for Impact Manage­ment. This is just one step of many that we as a company still have ahead of us on the road to beco­m­ing a sustainable asset mana­ger. For example, as a company we are commit­ted to the goal of achie­ving CO2 neutra­lity by 2025. Accord­in­gly, this will certainly not remain our only impact product.”

Risk mini­miz­a­tion through broad diver­si­fi­ca­tion and rigo­rous due dili­gence process

Golding Impact 2021’s stra­tegy is to build a port­fo­lio that is broadly diver­si­fied across sectors, regi­ons and company stages. Invest­ments are plan­ned in appro­xi­mately 15 target funds and selec­ted co-inves­t­­ments for admix­ture. In doing so, Golding follows a rigo­rous due dili­gence process when making invest­ment decisi­ons and has deve­lo­ped a sophisti­ca­ted impact manage­ment system that expli­ci­tly defi­nes the measura­ble impact objec­ti­ves of each invest­ment, making them verifiable.

The target compa­nies of “Golding Impact 2021” are mainly from the three sectors “Green Solu­ti­ons”, “Food and Ag-Tech Solu­ti­ons” and “Finan­cial Inclu­sion Solu­ti­ons”.

Green solu­ti­ons” include tech­no­lo­gies and busi­ness models that contri­bute to decar­bo­ni­zing econo­mic proces­ses or adap­ting to climate change. In mature target markets, this rela­tes prima­rily to energy effi­ci­ency, the moder­niz­a­tion of energy storage and grid infra­st­ruc­ture, and more sustainable trans­por­ta­tion. In emer­ging coun­tries, the main issue is deco­u­pling econo­mic growth and resource consump­tion. In this context, afforda­bi­lity and broad social access to these tech­no­lo­gies play a crucial role in the selec­tion of invest­ments, for example through solar hybrid village power systems.

“Food and Ag-Tech Solu­ti­ons” are inno­va­tive methods aimed at more sustainable agri­cul­ture, fores­try and food manage­ment. This inclu­des, among other things, the long-term safe­guar­ding of soil and water quality or the intro­duc­tion of higher-yiel­­ding and more resistant seeds. Digi­tal approa­ches in parti­cu­lar can also contri­bute to more effi­ci­ent orga­niz­a­tio­nal struc­tures for farmers, for example through the shared use of capi­­tal-inten­­sive machinery or modern supply chain management.

“Finan­cial Inclu­sion Solu­ti­ons” comprise modern solu­ti­ons to signi­fi­cantly simplify access to finan­cial services and make them avail­able to more people in emer­ging markets. On the one hand, the lack of access to tradi­tio­nal banking services hampers the over­all econo­mic deve­lo­p­ment of many emer­ging markets, and on the other hand, it often makes it diffi­cult to provide basic finan­cial secu­rity for emer­gen­cies at the indi­vi­dual level. FinTech compa­nies offer digi­tal alter­na­ti­ves in areas such as insurance, cash­less tran­sac­tions and lending.

Golding Impact 2021” is struc­tu­red as a Luxem­bourg SCS SICAV-FIAR and is aimed at insti­tu­tio­nal inves­tors with a mini­mum subscrip­tion amount of five million euros.

About Golding Capi­tal Part­ners GmbH

Golding Capi­tal Part­ners GmbH is one of the leading inde­pen­dent asset mana­gers in Europe for alter­na­tive invest­ments with a focus on the asset clas­ses infra­st­ruc­ture, private debt, private equity and impact. With a team of more than 130 employees in Munich, London, Luxem­bourg, New York, Tokyo and Zurich, Golding Capi­tal Part­ners supports insti­tu­tio­nal and profes­sio­nal inves­tors in buil­ding their invest­ment stra­tegy and mana­ges assets of appro­xi­mately €11 billion. The more than 200 inves­tors include pension funds, insurance compa­nies, foun­da­ti­ons, family offices, church insti­tu­ti­ons as well as banks, savings banks and coope­ra­tive banks. Golding has been a signa­tory to the United Nati­ons-initia­­ted Princi­ples for Respon­si­ble Invest­ment (UN PRI) since 2013 and a member of the Task Force on Climate-rela­­ted Finance Disclo­sures (TCFD) since 2021.

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