Impact investment seems to be the buzz-phrase of the moment, as the Nobel Sustainability Growth Fund (NSGF) today became the latest socially and environmentally focused investment vehicle to launch in London.
The fund boasts an impressive roster of partners including the Nobel Sustainability Trust, founded by members of the Nobel family, and Set3, the investment group founded by Gordon Power and Hargreaves Lansdown co-founder Stephen Lansdown.
NSGF will make private equity investments in the UK to build technology, manufacturing, services and asset development businesses which make a positive social or environmental impact. The fund will be managed by Sustainable Technology Investors Limited (STIL), the impact investing private equity branch of Set3.
“The UK continues to offer a strong pipeline of investments post Brexit,” said STIL managing partners Jim Totty and Nick Curtis in a statement. “Sustainability, innovation and technology will continue to drive the UK economy over the next 10 years, as underlying economic and environmental drivers see institutional capital flows continue into the sustainable sector.”
Rather than just funnelling cash into the businesses, NSGF intends to have an "active, hands-on" strategy.
An initial £10m has been provided by Set3 and Monaco's sovereign wealth fund, and NSGF aims to attract more investment to reach £100m. The Nobel Sustainability Trust, which focuses on promoting renewable energy, has lent its name in return for a cut of the profits.
STIL will evaluate the sustainability of its investments using its “Earth Dividend” model, which assesses a business's effectiveness based on the themes of natural resources, ecosystem services, pollution, social and economic contribution and society and governance.
The latest fund comes as the UK government has been urged to increase its own focus on sustainable investment.
A review earlier this month, commissioned by the government and led by senior figures in the financial industry and social sector, said that although there were opportunities for larger institutions to make impact investments the UK was “failing to keep pace in enabling individuals to make social impact investments".
In October, a panel of public and private sector leaders under the guise of the National Advisory Board on Impact Investing called on the government to create a £2bn Inclusive Economy Catalyst Fund. It said a "pensions with purpose" model could also help savers fund beneficial causes.