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Global Impact Pool Quarterly Investor Letter

29 May 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, 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

 

Financial return

Over the quarter the Global Impact Pool posted a return of -1.46% for the FA class.

Portfolio highlights

The first quarter was turbulent due to unprecedented global measures to curb the COVID-19 virus. Kempen has followed the advice of the Dutch and English government closely. The entire Kempen Global Impact Pool management team works from home. Team meetings and meetings with the impact fund managers take place by telephone or video conferencing. All travel abroad has been postponed for the time being. The GIP impact fund managers have also taken adequate measures to ensure the continuity of their business, tailored to their specific situation.

The summary below gives a brief overview of the main developments at our impact fund managers this quarter. Where possible, we provide an update on how COVID-19 affects management of the impact fund. 
 
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. 
The 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 more detailed information about the developments in the impact funds in which the Global Impact Pool invests, please refer to the fund one pagers at the end of this quarterly letter.


[1] Source: Impact of investment by GIP in the Agriculture Fund (per Q1)
[2] Source: Impact of investment by GIP in the Emerging Consumer Fund III, AgriDebt Fund and Quona (per Q4)
[3] Source: Impact of investment by GIP in Green Bond Fund (per Q1)

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2020, 29 May

Global Impact Pool - Quarterly Report

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Disclaimer

Luxembourg. 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 license 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 KCM (www.kcm.nl).
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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