Roundup: Impact Investing on the Rise, Generates Good Returns

Bill Gates to Double Cleantech Investments to $2 Billion

Bill Gates says he plans to invest another $1 billion of his personal fortune into cleantech and related companies. The philanthropist and Microsoft co-founder tells the Financial Times he’s already invested $1 billion in such companies.

Gates, the world’s richest man with a net worth of about $80 billion, says his existing $1 billion cleantech portfolio includes investments in areas such as battery storage, carbon capture and next-generation nuclear power. He tells the FT that those investments are likely to double over the next five years.

He is also encouraging governments to invest more in basic research and less into renewable energy subsidies. And he’s not in favor of the divestiture movement, where pensions, endowments and other institutional investors are pressured to sell their stakes in coal, oil and related companies. Gates says such moves will have little impact and instead encourages ”high-risk” investments in new technologies, he tells the FT.

Investor Interest for Impact Investments on the Rise

Investors are showing more appetite for impact investments as a new study says impact investing can bring market-rate returns. This comes even as a majority of financial advisors still say they have little to no interest in the space.

There’s been a “sharp increase in interest” for investments that take environmental, sustainable and governance issues to account, Barron’s reports from the Morningstar Investment Conference. Still, about 63% of financial advisors say they have “little to no interest” in sustainable investments, Barron’s says, noting that this could change given the interest among end-investors.

Morgan Stanley Investment Management’s Chad Graves says he likes firms that fully integrate ESG screening into their regular analysis, rather than those that just overlay ESG on top of existing investment processes, according to Barron’s.

Meanwhile, the $300 million F.B. Heron Foundation is moving toward investing 100% in impact investments, according to Forbes.

All this comes as a new study from Cambridge Associates and the Global Impact Investing Network find that impact investing, when done right, can deliver the same investment returns as more traditional investing, the Wall Street Journal reports.

Market-rate returns are absolutely possible among impact investments, GIIN CEO Amit Bouri tells the Journal — as long as you pick good managers.

Vital Capital Opens $500M Fund for Cleantech, Water, Ag in Africa

A Swiss private equity manager is launching a $500 million fund that will invest in clean energy, water, agriculture and other sectors across sub-Saharan Africa, Bloomberg reports.

Vital Capital Investments will make as many as 20 investments in countries like Rwanda, Angola, Mozambique, Tanzania, Ethiopia and Uganda, managing partner Eytan Stibbe tells Bloomberg. Other sectors of interest include education, affordable housing and healthcare.

The Zurich-based firm closed its first fund in July 2012 after raising $350 million of its $500 million target. The new Vital Capital Fund II has a $700 million hard cap, and officials expect a first close by the end of the year.

Vital Capital is among the top 10 funds rated for impact performance by the Global Impact Investing Rating System, according to Bloomberg.

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