Robeco, a division of Dutch bank Rabobank, plans to hold a first close early next year on its Robeco Responsible Private Equity II, a fund of funds targeting €250 million ($364 million).
Rabobank will commit up to 15 percent, or €35 million, of the fund of fund’s capital, but Robeco declined to disclose other limited partners.
The fund of funds will invest in private equity funds whose investments adhere to a robust set of environmental, social and governance (ESG) principles.
“The private equity sector is joining the global trend towards responsible investing,” Ad van den Ouweland, Robeco managing partner, told PEO.
In private equity, it's important to be a visionary.
Ad van den Ouweland
This style of investing – also referred to as sustainable or “PPP”, short for balancing people, planet and profits – was not widespread in alternative asset classes when Robeco closed its first such fund on €200 million in 2004.
Critics at the time quite bluntly told van den Ouweland that the fund of fund’s investment thesis would hamper returns. But Robeco believed an ESG-focus would distinguish it from competitors.
“In private equity it’s important to be a visionary, to be first, not a follower,” van den Ouweland said.
He added that second fund’s overarching principle is the same as its predecessor: “the objective is to outperform mainstream private equity”.
Robeco’s first fund invested with 20 managers including Apax and 3i, which just recently launched a website detailed to chronicling its corporate social responsibility-related activities.