More asset managers - Allianz Global Investors (AllianzGI) and M&G Investments now among them - are strenthening their positions in private markets with a focus on impact investing.
On January 28, London-based investment manager M&G (“M&G”) agreed to acquire a majoritiy stake in responsAbility Investments AG (responsAbility) for an undisclosed sum. ResponsAbility is a leader in impact investing focused on private debt and private equity across emerging markets.
“Following the acquisition, the investments that the team will be focused on include financial inclusion, climate finance and sustainable food businesses,“ a spokesperson told AsianInvestor.
Investing more than $11 billion in private assets across emerging markets since it was founded in Zurich in 2003, responsAbility currently has approximately $3.7 billion of assets under management as at year end 2021.
The acquisition boosts M&G’s position in the rapidly growing market for sustainable investments, especially in the exciting area of emerging markets. "It also accelerates the growth of our private assets franchise and augments our European institutional distribution", M&G told AsianInvestor. “
The acquisition is subject to regulatory approval. Some 200 employees from responsAbility will join M&G on completion of the deal, the firm said.
M&G, as of June 30 2021, manages a total of £370 billion in assets, with £306 billion in the UK, £48 billion in Europe, £9 billion in Asia and £7 billion in other international territories. Of these, a total of £65 billion is currently in private and alternative assets, making it one of the largest alternative asset managers in Europe.
An increasing number of asset managers, meanwhile, are following suit. German-headquartered Allianz Global Investors, also in late January, announced the creation of a dedicated private markets impact unit within its sustainable investment platform.
The new dedicated unit, which will be led by Matt Christensen, global head of sustainable and impact investing, combines existing equity and debt investing expertise with a newly created impact measurement and management capability.
Christensen will oversee a team of 12. Allianz GI declined to comment on whether the new unit would be adding more headcount as it expands.
“Impact investing is fast-growing out of its niche. Investors want to see a positive change for the planet while generating a return, and impact investing offers a solution for these twin goals,” he said.
He believes the future growth trajectory of impact investing will depend on asset managers demonstrating how the impact can be measured and reported.
“Our new Impact Measurement & Management approach enables us to measure impact in private equity and debt investments, and will allow us to develop our offerings further according to the best standards,” he continued.
According to a latest report published by US-headquartered Nuveen, over the past five years, the capital invested in its global fixed income impact investment strategies has nearly tripled to $7.8 billion as at December 2021.
Specific impact themes including, affordable housing, community and economic development, renewable energy and climate change and natural resources had received the biggest inflow.