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.
