M&G has launched a new multi-sector private debt fund that will invest in private and illiquid debt to achieve a positive social or environmental impact.
The diversified fund aims to provide investors with regular income and a total return greater than public bonds.
The £44.5 million ($63.6 million) M&G Impact Financing Fund has participated in several private and illiquid debt deals. These include the regeneration of the Greenwich Peninsula in London, supporting solar power in the United States and providing finance to U.K. housing associations. These deals will directly help build houses, provide employment and reduce CO2 emissions.
“Asset managers are playing an essential role in putting people’s savings to work in the economy to help create better futures for everyone,” said Anne Richards, chief executive, M&G. “This fund is an opportunity for charities, pension funds and other like-minded investors to lend for impact by financing projects that benefit both the environment and society.”
Richard Sherry, manager of the M&G Impact Financing Fund, added, “Environmental and social considerations have long been integrated into our fixed-income investment process, but the philosophy behind this fund is to actively seek investments that will have a measurable positive impact. It is vital that investors can clearly see what their money is doing to improve people’s lives and the environment whilst providing stable financial returns.”
M&G has worked with Sustainalytics, a leading independent provider of sustainability research, to devise a methodology to assess and measure the impact of the fund’s investments. M&G Prudential, Big Society Capital and The Swedish Foundation for Strategic Environmental Research are all seed investors in the fund.