Hamburg-based private bank Berenberg and LGT Venture Philanthropy, the impact investing initiative of the Princely Family of Liechtenstein, have held a first close on £20.8 million (€25 million, $34.2million) for Impact Ventures UK, a social impact fund.
Limited partners in the IVUK fund include social investment bank Big Society Capital, which committed £10 million commitment and is acting as cornerstone investor; the London Borough of Waltham Forest Pension Fund; Deutsche Bank via the DB Impact Investment Fund; Stichting Anton Jurgens Fonds and The Golden Bottle Trust.
It is unclear how much the fund is targeting. A spokesperson for the fund was not available for comment at press time.
Impact Ventures UK invests in social enterprises which have the ability to deliver high social impact in the UK and targets financial returns of 7 percent IRR net of fees and expenses. The fund will target businesses that create “strong positive social impact for disadvantaged people and communities in the UK”, according to a statement. Target investments of between £300,000 and £5 million will be made in a range of businesses, from technology-orientated social enterprises to service orientated companies, according to the fund’s website.
The investment team for the fund is led by Raf Goovaerts, formerly of CCMP Capital and JP Morgan Partners, who was part of the team that established the Business Growth Fund in the UK. The fund’s independent investment committee also includes Richard Brass, head of UK clients at Berenberg Private Banking, and Alexander Leeb, chairman of the LGT VP Foundation.
“IVUK was created to provide the opportunity for a wide range of like-minded investors, entrepreneurs and strategic partners to pool and share their resources and experience,” Brass said in the statement, adding that he hopes the fund will inspire “more people to invest and participate as the social investment sector grows”.
IVUK will offer co-investment opportunities to its LPs and hopes to benefit from Berenberg’s relationship with the UK social enterprise community and LGT Venture Philanthropy’s experience of investing globally to create social impact. The closed-ended fund is domiciled in Luxembourg and has a ten year term with two possible one year extensions.
By 2016, demand for social investment from organisations working to deal with some of the UK’s most entrenched social problems could reach £1 billion, according to Nick O’Donohoe, chief executive of Big Society Capital.