M&G Investments (M&G) has launched a new impact-focused private debt strategy with a €300m (£261.4m) commitment from Dutch pension fund, Pensioenfonds KPN.
Aegon Asset Management has selected M&G as one of the managers for the private debt mandate of Pensioenfonds KPN.
The SFDR Article 9-classified fund will provide corporate loans to businesses focused on generating positive environmental and social outcomes in areas such as climate, technology and responsible production.
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12 investments have already been completed to date, including a commitment to Bollegraaf Group, a Dutch firm focused on advanced recycling technologies.
“Many European companies are taking a leading role in providing solutions in areas such as clean tech, future-proofing their operations and developing systems that support real world outcomes,” said Sander Van der Wel, M&G’s director of institutional business development in the Netherlands.
“To do this they need the support of patient capital and long-term institutional investors are exceptionally well positioned to provide this much needed investment.
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“Our partnership with Aegon AM’s fiduciary management team is a reflection of our long-standing relationship and demonstrates how asset managers and asset owners can develop innovative financial solutions that address global challenges, whilst providing attractive risk adjusted returns for long-term pension savings.”
All investments in the portfolio will need to meet a minimum set of sustainable criteria. There is a remit to invest globally but it is expected that European private corporate loans will comprise the majority of the portfolio.
“Over the past few years we have explored the possibility of impact investing within private debt for Pensioenfonds KPN,” said Karin Roeloffs, head of fiduciary management at Aegon Asset Management.
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“After an extensive search trajectory with an additional focus on ESG and impact investing via a specific impact due diligence, M&G was selected for the impact corporate debt mandate. Other strategies and managers will complement this corporate debt allocation. The goal is to contribute to the impact goals and ESG themes of Pensioenfonds KPN alongside a target risk adjusted financial return with a well-diversified portfolio.”
There is growing demand for impact-focused private debt, particularly in Europe. Over the past decade, the number of dedicated funds has tripled, raising more than €66bn globally with a target size now approaching €83bn, according to data from Phenix Capital Group cited by M&G.
