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Global Impact Pool Quarterly Investor Letter

25 February 2020

Specifically, we aim to:

  1. Contribute to the 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:
  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

 

Financial return

Over the quarter the Global Impact Pool posted a positive return of -0.7% for the FA class, bringing year to date return to +1.6%. The investments in the Agriculture Debt Fund and ESPF 4 contributed positively to performance. The Organic Growth Fund and the Green Bond Fund detracted from performance.

Portfolio highlights

Most investments continued to develop well over the fourth quarter of 2019. At the end of the quarter, the GIP team successfully concluded its due diligence on an investment in the Accion Quona Inclusion Fund (AQIF). AQIF focuses on financial inclusion by making investments in early-stage fintech companies in Emerging Markets. As a result, this latest investment focuses on SDG 8: Decent work and economic growth. More specifically, the fund focuses on sub goal 8.10: “Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all”. 

More details on the impact targets and the investment strategy of AQIF can be found on the fund one pager in this Quarterly Report. An example of an investment of this fund is highlighted in the Impact Case Study. 
 
Emerging Consumer Fund III participated in a follow-on investment in Goodlife Pharmacy this quarter. The investment enables Goodlife to continue its growth in the years to come. Goodlife reached 1.4 million people in the last 12 months. The company employs 322 people of which 60% are female. 
Agriculture 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 continue to manage a diversified portfolio of 64 institutions in 35 core countries, reaching 16,043 farmers.
ESPF 4 added three new projects to its investment portfolio. The solar park projects are still in the development stage and are located in Portugal, Poland and Germany. 
Organic Growth Fund (OGF) had a challenging quarter as it had to make downward adjustments to the valuations of some of its portfolio holdings, the result of deteriorating profitability of those companies. This had a negative impact on OGF’s performance this quarter. In January 2020, the GIP-team decided to fully redeem its small investment in OGF. The GIP team has concluded that OGF is not well positioned to grow its portfolio and assets sufficiently, all prerequisites for a longer term (additional) investment by GIP. On top of that, the impact investing market is developing rapidly, and the GIP team believes that a number of impact investment managers that are currently raising funds might provide good alternative opportunities to be exposed to the theme of responsible consumption. The GIP team expects to introduce a replacement for OGF during the 2020 calendar year.
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 98 issuers and 163 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 10,300 tons of CO₂ was avoided, which is the equivalent of emissions from 4,150 cars.

For further details on the developments of the funds in which the Global Impact Pool is invested, please see the Fund ‘one-pagers’ at the end of this letter that can be downloaded below. 


[1] Source: Impact of the investment by GIP in AgricultureFund (Q4) and organic Growth Fund (Q3)
[2] Source: Impact of the investment by GIP in Emerging Consumer Fund III (per Q3)
[3] Source: Impact of the investment by GIP in the Green Bond Fund (per Q4)

Download our Quarterly

2020, 25 February

Global Impact Pool - Quarterly Report

Download

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.

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