Specifically, we aim to address the following impact themes:
Bearing in mind our mission, there is also the explicit target to generate a market rate financial return.
The Kempen Global Impact Pool (GIP) achieved a negative return of -4.4% for the FA share class during the fourth quarter of 2022, resulting in a return of 0.7% for the full calender year. The average annualized return over the last 3 years is equal to 5.9%. Since the launch of the fund in the beginning of 2018, the fund realized an average annuallized return of 3.5% for its participants.
Financial markets faced several strong headwinds during 2022, driven by rising interest rates, severe supply chain disruptions and high inflation. As a result of this challenging market environment, many asset classes eventually delivered negative returns. The balanced investment portfolio of the GIP, however, managed to deliver positive returns for the full calendar year. The Infrastructure and Private Debt part of the portfolio contributed positively to performance, while the Private Equity and Venture Capital components detracted slightly. For these two latter components, the negative effects from the macro-economic environment were mitigated by several strong valuation uplifts at the underlying individual company level. Another tailwind for the strategy was the strengthening of the US dollar throughout 2022.
The GIP continued its mission to pool capital and scale impact on behalf of its participants during the last quarter of 2022. Assets under management increased to €178 million at the end of December 2022. This increase can be attributed to a strong inflow of client assets. On a net basis, there have been inflows of approximately €16.3 million for the GIP during the quarter. After quarter’s end, a similar inflow occurred since around €16.0 million in capital was called from investors in the F-share class. This allows the GIP and its investment partners to deploy capital in
a market that offers many opportunities at relatively attractive valuations.
During the fourth quarter of 2022, the team managed to deploy almost €16 million of new capital to the GIP’s investment partners, who have been calling capital to fund new investments. Capital was called by nearly all of GIP’s investment partners, with a significant amount drawn by KGAL (ESPF 5, European sustainable infrastructure), Trill Impact (Northern Europe Private Equity – broad impact mandate) and Quona Capital (Opportunity Fund, Emerging Markets Venture Capital focused on financial inclusion). The most capital was, however, called by our new investment partner Impax for their New Energy Investors Fund IV. This strategy can be labelled as European value-add sustainable infrastructure, as the focus of this strategy lies on investing in platforms which developed multiple sustainable infrastructure projects in Europe.
The overview below provides a summary of the most important developments in the portfolio this quarter per individual impact theme.
With its investments within the Climate and energy transition theme, the GIP contributes to the energy transition towards more sustainable energy sources. During the fourth quarter of 2022, most capital was allocated to this theme as capital was called by four of our investment partners. As a result, the GIP’s exposure to the Climate and energy theme increased significantly over the quarter.
EIF, GIP’s investment partner that funds early-stage companies focusing on climate solutions, called capital to finance the investments in AMP and T8N. The US Headquartered company AMP offers both hardware and software solutions to manage the charging, discharging and battery health of electric vehicles. The Eight Notch, abbreviated as T8N, has created a software solution which identifies and merges package shipments that share a common or similar destination. This solution significantly reduces costs and emissions for large carrier consumers like UPS and FedEx.
Our European Impact Private Equity partner, Trill Impact, called capital to finance their investment in RakSystems, a transaction which they have completed earlier in the year. RakSystems, a Finish company, is the leading firm in the Nordics focused on building services like inspections, energy/life cycle assessment, certification and renovation projects.
KGAL, our German investment partner with currently two funds in GIP’s portfolio, invests in the development of wind farms and solar energy parks in Europe. KGAL continued to make good progress with the development of its assets during the quarter, resulting in a decent amount of capital being called for their most recent fund (ESPF 5). This capital was used, among other things, to finance the construction of a solar power plant and windfarm in Italy together with financing development platforms in Germany and Spain. All these investments will soon add a significant amount of renewable energy capacity to the network.
Our new investment partner within this theme, Impax, called a considerable amount of capital to finance both the already existing portfolio and some new investments which have been completed more recently. The existing portfolio consists of several platform deals which focus on developing windfarms and solar plants in Germany, Poland, Greece and Italy. The most recent platform deals, for which capital was called this quarter, are aimed at developing solar plants in Italy, Ireland and the USA.
The impact case for this quarter focuses on the impact opportunity in India, as the GIP’s investment team completed a field trip in this country in December 2022. The objective of this trip centered around (1) experiencing the impact which the portfolio companies are achieving, (2) meet and review the investment partners in their daily operations, and (3) source new investment opportunities in the country.
Luxembourg. Van Lanschot Kempen Investment Management (VLK IM) is the management company of the Fund. Van Lanschot Kempen Investment Management is authorized as a management company and regulated by the Dutch regulator Autoriteit Financiële Markten. The Sub-Fund is registered under the license of Van Lanschot Kempen Investment Management at the Autoriteit Financiële Markten and not subject to Luxembourg supervision. The shares of the Sub-Fund are admitted for (public) offering in the Netherlands, the UK, France and Switzerland. The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (only for the Netherlands) and the prospectus. These documents of the Fund are available on the website of VLK IM.
The Sub-Fund may have investments in financial instruments mentioned in this document and it may at any time decide to execute buy or sell transactions in these financial instruments. The views expressed in this document may be subject to change at any given time, without prior notice. The information in this document not intended and should not be considered as research, an investment recommendation or as an offer and provides insufficient information for an investment decision.
Although the contents of this document have been compiled with the utmost care, and are based on reliable sources of information, no guarantee or warranty is given and no liability is accepted, express or implied, regarding the completeness or accuracy of the contents.
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested. Past performance provides no guarantee for the future.