Titans of impact
Our colleagues at New Private Markets last week published their second annual ranking of the world’s largest impact managers (registration required). As the sector expands and NPM‘s data set becomes richer, the list has grown in size from 20 to 30 firms. Here are key highlights from the latest ranking:
- Actis, the sustainable infrastructure investor, has been knocked off the top spot by TPG, an early mover among mega-firms in the impact arena. TPG’s final close in March of its $7 billion Rise Climate Fund primarily drove its ascent to the top.
- Change will be frequent at the top. After the research period for this year’s ranking, Brookfield held the final close of its inaugural impact fund on $15 billion, adding a further roughly $5 billion to its Impact 30 figure (which would have been enough to overtake TPG).
- One of the nuances of impact investing is the unconventional LP base it attracts. Alongside the familiar institutions and DFIs, we’re increasingly finding corporates with a strategic interest. The latter have propelled Energy Impact Partners and OGCI Climate Investments (backed by energy and oil companies respectively) on to this year’s list.
- The largest cluster of Impact 30 managers is in London, where seven firms have their headquarters; New York is home to four, as is Zurich (if you include nearby Baar-Zug).
NYCRS to meet you
New York City Comptroller Brad Lander has named a former State Street veteran as chief investment officer for the $266 billion New York City Retirement System, per a Tuesday statement. Steven Meier, who will join in August, most recently served as assistant treasurer and interim CIO for the Connecticut Office of the State Treasurer, overseeing the investments of Connecticut’s $40 billion public pension system and its ESG initiatives. Before that, he spent more than a decade at State Street Global Advisors, including as CIO for global fixed income, currency and cash management, overseeing more than $900 billion in assets.
Meier replaces interim CIO Michael Haddad, who stepped up following the departure of Alex Doñé in December. Doñé joined Platinum Equity, a Los Angeles-headquartered buyout firm that had a longstanding relationship with NYCRS. His move sparked an internal investigation by Lander into whether Doñé had complied with all the rules governing his move to the private sector.
Doñé was one of several senior executives to have left the pension giant in recent years. Senior investment officer Cristian Norambuena left in January in what was understood to be the fifth departure since May 2021 from a group assembled by former PE head David Enriquez, and followed that of fellow senior investment officer Katja Salovaara earlier that same month. Finding reinforcements is therefore likely to be one of the first items on Meier’s agenda.
How much have Eurazeo’d?
Eurazeo has held a €1 billion close for its fourth fund dedicated to the international expansion of French SMEs, Olivier Millet, managing partner and head of small-mid buyout, tells Side Letter. Eurazeo PME IV Fund is more than 50 percent larger than its 2017-vintage predecessor, according to PEI data.
More than 60 percent was raised from institutional and private investors, compared with 38 percent for Eurazeo PME III; the remaining capital is funded from Eurazeo’s balance sheet. LPs include BNP Paribas Cardif, Société Générale’s Sogecap and AlpInvest Partners. Around 95 percent of investors have re-upped in this latest vehicle, with the exception of one legacy LP that decided not to invest in PE any more, Millet said.
Fund IV is already 40 percent invested across five investments. In this uncertain environment, companies are going to have to transform “almost everything in a company” over the next decade, including people management, customer relations, as well as how they source energy and products, Millet noted. “If you are alone with your small boat, your small SMEs… don’t have access to this type of knowledge. Private equity… is bringing this type of unique competence [and] skills to become much more digital, much more ESG [focused], much more international, whatever you call it, to adapt your business to this very tough environment.”
They did the math
European deal activity got off to a strong start in the first half of the year amid a tighter policy environment, the war in Ukraine, persistent inflation and volatile markets, according to Pitchbook. Some 4,053 deals worth €463.5 billion closed in the period, a 16.2 percent and 34.8 percent increase respectively from last year.
There were three times as many deals worth more than €2.5 billion in H1 2022 compared with the first half of last year. Take-privates accounted for €17.5 billion of deals closed in H1, up 22.4 percent from the prior period. Exit value fell 25.3 percent to €157.8 billion, while volume remained flat.
Today’s letter was prepared by Alex Lynn with Rod James, Carmela Mendoza and Madeleine Farman