Vettivetpillai lays out plans for LGT Impact

The former Abraaj managing partner left the embattled firm in April to run the impact investing arm of asset manager LGT Group.

Former Abraaj Group managing partner Sev Vettivetpillai is getting stuck into his new role as chief executive officer of LGT Impact, the impact investing arm of asset manager LGT Group.

Vettivetpillai will be putting his considerable emerging markets experience to good use seeking investments in Brazil, sub-Saharan Africa, India and Europe to address the unmet demands of billions, he told Private Equity International.

A veteran of emerging markets investing, Vettivetpillai was the founder and chief executive of emerging markets manager Aureos Capital Group, which was merged with Abraaj Capital to form The Abraaj Group in 2012.

At Abraaj, Vettivetpillai was global head of impact investing until Kito de Boer took over in September. He was also a permanent member of the investment committee responsible for managing, reviewing and approving all Abraaj investments across the platform, according to his biography on LGT Venture Philanthropy’s website.

Vettivetpillai submitted his resignation in December before news broke that four investors in the $1 billion 2015-vintage Abraaj Growth Markets Health Fund had hired an auditing firm to ascertain whether the firm had misappropriated money from the vehicle.

He officially left the firm at the end of April, as reported by PEI. According to an Abraaj spokeswoman at the time, he was set to continue to serve as a non-executive member of Abraaj’s Global Investment Committee until the end of the year.

Vettivetpillai was appointed to the board of LGT Venture Philanthropy Foundation in November, according to its website.

What attracted you to join LGT Impact?

I am very excited by this opportunity, having committed a significant part of my working life to investing in private businesses in global growth markets. These businesses not only brought about attractive returns, but positive impact to all stakeholders including, but not limited to, the communities and economies in which I have invested.

The enormous work that LGT Impact, under the leadership of Prince Max von und zu Liechtenstein, has already achieved, is an excellent platform to continue to build on that success story in the field of impact investing and philanthropy. Our objective is very simple and that is to offer private and institutional investors the opportunity via investments to make a positive impact on society and the environment while at the same time generating an attractive financial return.

Are you bringing any other Abraaj colleagues with you? What are your plans for growing the team?

No, we are presently looking to augment the existing LGT Impact team from the marketplace.

Which regions are most attractive to you for LGT’s impact investments and why?

Initially, the firm will focus on its core geographies in global markets such as Brazil, sub-Saharan Africa, India and Europe. These regions represent large markets with unmet demand of billions of people with regards to access to affordable quality products and services as well as improved livelihoods, which LGT Impact is looking to address.

Could you share any details of the funds you plan to raise, their targets, return expectations, and types of impact investments they will focus on?

The core geographies are those mentioned above. The strategy is to back high quality management teams with proven track record. We invest in purpose-driven companies with scalable business models that provide access to services and products that address the needs of low-to-middle income consumers and positively impact the environment whilst providing attractive financial returns.

LP often worry about the issue of manager alignment in impact funds. How do you plan to ensure GP compensation is aligned with financial and impact returns?

Sure, it is one of the main areas, but not the only one, that we will look to come up with some innovative models. We are quite advanced in our thinking and structure, but not ready to disclose details.

In your view, how do you measure an impact investment’s success?

We use proprietary tools and frameworks to assess and measure the societal and environmental value creation of our investments. Together with our portfolio companies, we use these insights to constantly improve and maximise impact and returns. To enhance the impact management capabilities of our team and portfolio organizations, we also collaborate with partners such as the non-profit organisation Grameen Foundation and research centre Abdul Latif Jameel Poverty Action Lab in order to gain insights into the drivers for positive impact creation. In addition, we collaborate with leading organisations in the sector to build impact management capacity within LGT Impact as well as our portfolio organisations.