Brunel Pension Partnership has committed $60 million (£46 million) to a private equity impact fund with fund manager Neuberger Berman, for four of its underlying pool members.
Brunel said that it made the investment because it saw it as an excellent investment opportunity, rather than for a specific impact mandate. Brunel’s head of private markets, Richard Fanshawe, said the new fund is designed to seek attractive returns while also using investable themes from the United Nation’s Sustainable Development Goals (SDGs). Neuberger Berman will target direct co-investments in companies, as well as investing in specialist impact funds. In this way, it will encourage traditional private equity markets to integrate ESG factors into their investment process, while also supporting specialist impact managers.
As ESG and impact investing become more mainstream, there are concerns that some managers are “greenwashing” – merely paying lip service to responsible investment principles. Fanshawe said that he had been impressed by the impact screening used by Neuberger Berman to ensure that it identified suitable investment opportunities. “We believe this not only improves overall risk consideration but hones in on the tangible impact these companies can have and allows the manager to track relevant reporting key performance indicators to improve thesis using the Sustainability Accounting Standards Board framework.”