Swedes Commit to Impact Boutique

Stockholm (NordSIP) – On December 11, Sonanz, a new boutique fund manager based in Munich, Germany, announced the launch of its first fund Sonanz Impact 1 with just $10 million. The vehicle is a private-equity fund of funds focused on impact investments. The investor based is composed of mostly German and Swedish investors, among which pension fund SEB Stiftelsen and the H&M Foundation.

The new fund is planning to invest in four to six private equity funds, which investments support underserved segments in emerging markets, in sectors such as financial services, clean energy, affordable healthcare and education as well as sustainable food & agriculture. The team’s first investment, Lok III, is an excellent example of what they look for. This fund, managed by Indian private equity Lok Capital, invests in companies active in financial services, healthcare and agriculture serving the Indian low-income segment. The firm’s track record dates back to 2004. Not only have the returns been good, but Lok also contributed significantly in building the country’s microfinance sector.

Commenting on the fundraising process to NordSIP, Andreas Nilsson, founder and Managing Director at Sonanz, said: “There is a tremendous interest for our fund. However, most institutions have restrictions on minimum size and first-time funds. We are very therefore extremely proud to have such well-renowned and sophisticated investors as SEB and H&M Foundation on board for our first fund.”

With Nilsson’s Swedish background and the firm’s base in Germany, it is perhaps not entirely surprising that most of the funds were raised close to home. “Raising capital for a first-time fund is never easy, especially if you are the first in a new niche market. I think my experience, which includes EQT, UBS and a PhD from Handels/Harvard, played an important role in gaining our investors’ confidence,” explains Nilsson.

Looking ahead, Nilsson is hopeful that interest will be building further. “Impact-focused private equity is a huge opportunity for responsible investors and is today virtually non-existent in the portfolios of mainstream investors. We expect this to change in the coming years,” he says.

 

Picture © Sonanz