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 return of 4.7% for the FA share class during the second quarter of 2022, resulting in a YTD return of 3.9%. The return over the last 12 months amounts to 21.9%, while the average annualized return over the last 3 years is equal to 6.9%. Since the launch of the fund in the beginning of 2018, the fund realized an average annuallized return of 4.6% for its participants.
The positive momentum of the fund in 2021 continued during this second quarter of the year. The core impact investments in Private Equity and Venture Capital delivered strong returns mainly as a result of valuation uplifts at the underlying company level and a tailwind from the strengthening US dollar, the result from the global nature of GIP’s investment portfolio. The GIP’s infrastructure allocation, which focuses on European greenfield renewables projects, also realized decent returns as developed assets in solar and wind energy are increasingly becoming operational and are starting to generate revenues.
The GIP continued its mission to pool capital and scale impact on behalf of its participants during the second quarter of 2022. Assets under management increased to €166 million at the end of June 2022. This increase can be attributed to an increase in the value of the investment portfolio and a significant inflow of client assets. On a net basis, there have been inflows of approximately €12 million for the GIP during the second quarter of the year.
During the second quarter of 2022, the team has been successful in deploying a significant amount of new capital. Throughout the quarter, capital was called by most of our investment partners, with EIF (US venture capital - energy transition and circularity) and Trill Impact (Northern Europe Private Equity - broad impact mandate) accounting for the majority called. Also, at the end of the second quarter, the GIP has committed fresh capital to a new fund raised by our partner LeapFrog, which is investing in companies that (1) fuel financial inclusion and (2) provide essential health services to low-income customers in underserved, emerging markets.
GIP’s investment team has further enhanced its promising pipeline with new investment opportunities, the majority of these opportunities reside within the Climate and Energy impact theme.
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 transition to more sustainable energy sources. KGAL, with currently two funds in GIP’s portfolio, invests in the development of wind farms and solar energy parks. KGAL continued to make good progress during the quarter, as again a significant amount of additional capital was called causing the exposure of the GIP to the Climate and energy theme to increase. This capital was used, among other things, to provide additional funding to an offshore wind farm in the German North Sea (Veja Mate), and solar power plants in Portugal and Italy. These investments will soon add a significant amount of renewable energy capacity to the energy network. We can also already share that, after the end of the second quarter, the GIP committed significant additional capital to KGAL’s latest fund which reflects our conviction in this investment partner and its exciting pipeline of projects.
EIF added two new exciting companies to the portfolio during the quarter. Capital was called for an investment in Ambient Photonics, a company with the aim to bring low light energy production technology to scale. The company produces photovoltaic cells which can generate energy from e.g., LED, fluorescent or diffuse sunlight, and therefore can be a replacement for batteries in e.g. (small) home appliances. EIF also invested in Vibrant Planet, this company uses cloud-based technology and data-driven science to make its consumers more resilient in light of climate change. An example of a service is a planning and monitoring tool for adaptive land management systems with the goal of restoring the ecosystem.
The impact case for this quarter focuses on Aviom Housing, an investee in the loan portfolio of the Northern Arc India Impact Fund. Aviom Housing has developed and designed a model that allows it to provide affordable and easily accessible housing finance loans to low-income individuals and families in India.
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.