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Global Impact Pool Quarterly Investor Letter

08 March 2019

Specifically, we aim to:

  1. contribute to provision of basic goods & services for the underserved including water and health & wellbeing;
  2. provide for decent jobs with fair employment practices to eradicate poverty;
  3. support sustainable consumption and production aimed at doing more and better with less, and;
  4. contribute to abundant clean energy and reduction of CO₂ emissions.

Bearing in mind our mission, there is also the explicit target to generate a market rate financial return.

IMPACT HIGHLIGHTS

Figure 2  Figure 3 

 10,076

farmers reached

 130 MW

renewable energy to be produced

 11,000 Tons

CO2 avoided

Financial ReTURN

Over the quarter the Global Impact Pool posted a negative return of -0.57% for the FA class, and -0.67% for the FC class. Of the underlying investments, the Emerging Consumer Fund III, the Agriculture Fund and the Green Bond Fund contributed positively to performance. ESPF 4 and the Organic Growth Fund detracted from performance. The fourth quarter return resulted in a full year 2018 return of -1.6% for the FA share class, which was launched on 2 January, and -0.2% for the FC class which was launched a quarter later on 1 April.

Portfolio highlights
During the quarter we have started due diligence on two new potential investments for the Global Impact Pool. Both are at its core targeted at SDG #6: Clean Water and Sanitation, where the first potential investment would work towards increasing water-use efficiency, increasing recycling and improving water quality, and the second towards providing people with adequate and equitable sanitation. The Fund’s investments are developing well. Underlying funds are on average able to deploy their available capital efficiently, with the resulting benefit to investors since a fully invested portfolio helps to mitigate the J-curve effect significantly.

Emerging Consumer Fund III added a new investment to its portfolio during the fourth quarter. This makes for a total of five investment in the portfolio : two investments provide capital towards affordable and good quality healthcare, and three towards affordable and good quality financial services. A sixth investment is expected for the first quarter of 2019. We are very positive on the speed with which capital is being deployed in this first year after its first close.  

Agriculture Debt Fund continues to deploy capital towards financing and growing agricultural small- and medium- sized businesses with a specific focus on ensuring fair prices and wages for farmers and workers, protecting the environment, and a safe work environment. They have built a diversified portfolio of thirty institutions in eighteen core countries, in Q8 2018 reaching 10,076 farmers. The crop cycle currently results in an increased allocation to Central and South America (coffee).

ESPF 4, which focuses on renewable energy infrastructure projects in Europe, added three projects to its portfolio during the fourth quarter: i) a solar plant in Bulgaria with an installed capacity of around 43 MWp, ii) a to be developed onshore windfarm in Sweden which is targeted to generate 130 MW once operational in 2020 iii) an off shore wind project in Germany with an installed capacity of 402 MW. ESPF 4 is building up its portfolio and has so far five projects in its portfolio (three solar projects, and two wind projects).

Organic Growth Fund which allocates capital towards a more responsible and efficient consumption and production value chain added two new investments to its portfolio. The Fund invested in a UK-based enterprise producing reusable coffee mugs made from natural fibre. Their motto is ‘No excuse for Single-Use. Choose to Re-use’, and a French company offering ready-to-cook meals to flexitarians and vegetarians.

Green Bond Fund continues to be a diversified portfolio of bonds where the proceeds will be applied to finance new or existing projects that have a measurable positive impact on the environment. The portfolio has 89 issues and 132 issues. Impact is measured amongst others by SDG 7: Affordable and Clean Energy, and more specifically by Greenhouse gas emissions avoided. Through the investment in the Global Impact Pool close to 11,000 tons of CO₂ was avoided, equivalent to the annual emission of 1422 households or 4392 passenger cars [1]

For further detail on the developments in the funds in which GIP is invested, please refer to the fund ‘one-pagers’ at the end of this letter that can be downloaded below. 


 

[1] Source: NN Investment Partners and milieucentraal

 

Download our Quarterly

2019, 08 March

Global Impact Pool - Quarterly Q4

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Disclaimer

Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorized as a management company and regulated by the Dutch regulator Autoriteit Financiële Markten. The Sub-Fund is registered under the licence of KCM 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 Kempen.

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.

 

Our team

Marjoleine van der Peet
Narina Mnatsakanian

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