Mistra Seeds M&G new Private Debt Launch

    Stockholm (NordSIP) – M & G Investments launched a new fund this week, which primarily invests in private and illiquid debt which are targeted at positive social or environmentally sustainable development. Mistra, the Stockholm-based Foundation for Environmental Strategic Research, has seeded the fund, along M&G Prudential and Big Society Capital.

    M & G’s Impact Financing Fund, which totals just over SEK 0.5 billion (€50 million) has invested in several private and illiquid debt agreements. These include for instance lending to property developers behind the rebuilding of the Greenwich peninsula in London, support for solar energy projects in the United States and financing of UK public housing companies. These agreements will help to build new real estate, create employment and reduce carbon dioxide emissions.

    NordSIP reached out to Mistra for comments: “Mistra finds the mapping of the fund’s investment themes to the United Nations Sustainable Development Goals (UN SDGs) very promising,” says Åke Iverfeldt, CEO of Mistra. “The SDGs are included in Mistra’s investment policy and we are, in dialogue with our fund managers, looking for a suitable process to follow up our investments in relation to all of the SDGs.”

    We also asked M&G to give us some more details about the measurements that have been developed to report the impact of the investments. “Working with Sustainalytics, we have spent 2-3 years developing a comprehensive set of impact criteria (we have a 40+ page booklet describing this) against which each asset is assessed prior to investment, and on an ongoing basis once it is in the fund. We will be providing our investors with an annual report measuring the impact on an asset by asset basis. The investments we have already made help to demonstrate this:

    • A pool of rooftop solar loans in the US which produce 100,000 MWh of clean electricity per year. This avoids 50,000 tonnes of CO2 per year;
    • Two loans to housing associtions in the UK which will develop over 2,000 new social homes, in areas where there issignificant demand for affordable and social housing;
    • A regeneration project which will build 4,000 new social homes, will create 13,000 jobs (meeting the economic inclusion critera the fund also has), and will build commercial properties to a ’BREEAM excellent’ standard. BREEAM excellent buildings on average produce 32% less CO2 emissions.”

    We are very pleased to have Mistra as a seed investor in the fund as the organization is a market leader in environmental investment and research in the Nordics. Mistra is very engaged and active in promoting the impact investment market more generally.”

    Picture © Shutterstock SCOTTCHAN

    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA is Editor-in-Chief for NordSIP and Managing Director for Big Green Tree Media. She has 18 years of experience in the asset management industry in Stockholm, London and Geneva, including as a long/short equity hedge fund portfolio manager, and buy-side analyst, but also as CFO and COO in several asset management firms. Aline holds an MBA from Harvard Business School and a License in Economic Sciences from the University of Geneva.

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